How YOUR state pension is under threat as five million face being £16,500 out of pocket – four steps to take NOW

FIVE million elderly face waiting an extra year to claim their state pension, which could leave each of them at least £16,500 out of pocket. As a shake-up to the system looms, the Government is considering bringing forward plans to increase the age at which people can start drawing their money by seven years. Millions could be forced to wait an extra year for their state pension under proposed changes, leaving some at least £16,500 worse off Credit: Getty Read on for ways to make sure you don’t lose out if the date you can claim your state pension is put back But Adele Cooke has a plan for you to cover the shortfall . . . WHAT’S HAPPENING? CURRENTLY, you can start claiming the state pension when you’re 66, with the age gradually rising to 67 by April 2028. Sign up for the Money newsletter Thank you! It had then been set to increase to 68 between 2044 and 2046. But these plans could now be fast-tracked, according to the Office for Budget Responsibility. In its fiscal risk and sustainability report published this month, the OBR stated that the Government’s “current policy” is that the state pension age will rise to 68 between 2037 and 2039 — seven years earlier. It is also expected that the state pension age will rise again to 69 between 2073 and 2075. WHO IS AFFECTED? Around five million people aged 49 to 55 could be forced to wait an extra year for their state pension Credit: Alamy THE change would mean that around five million people aged between 49 and 55 would be forced to wait another year before they can claim their state pension. They would be £12,500 out of pocket in today’s money, but this does not factor in the triple lock, which guarantees rises in line with inflation, earnings growth or 2.5 per cent — whichever is highest. Most read in Money If the state pension were to grow by the minimum 2.5 per cent over the next 11 years, it would be worth approximately £16,500, acc­ording to Hargreaves Lansdown. The plans, which could save the Treasury £6billion a year from 2037, have been slated by critics. Currently, more than one in four UK pensioners say they’re struggling financially, and three million adults over 66 find their energy bills unaffordable, Age UK found. The Centre for Ageing Better charity claims that when the state pension age rose to 66 in 2020, it doubled the poverty rates for 65-year-olds — and it believes the impact of raising this to 67 would be “even bigger”. Think tank Standard Life Centre for the Future of Retirement has said twice as many low ­earners will see their household finances hit compared to high earners. Dr Carole Easton, chief executive of the Centre for Ageing Better, believes the move is “extremely worrying”. She said: “For too many people, their 60s is a time of huge ­financial stress, living in desperate hope they have sufficient resources to last out until state pension age. “The Government should not be looking to extend this suffering.” But a Treasury spokesman denied there are plans to bring forward the age raise, saying: “The law remains to increase the state pension age to 68 in 2044. “In July 2025 we announced the launch of the third review of the state ­pension age, as required by ­legislation.” SO, HOW DO I COVER THE £16,500 SHORTFALL? Experts are urging savers to boost pension pots now as millions face a possible extra year before retirement Credit: Alamy IT is important to plan now, ahead of any possible change. The first step is to prioritise your private pension, if you have one, as this will become even more important to bolster your finances in your later years. Focus on any workplace pension first. This is because you essentially get free money added to your pot by your employer. Your employer must set one up for you and contribute to it if you earn over £10,000 and are be­tween 22 and the state pension age. You pay at least five per cent of your salary into the pot and your employer adds three per cent. A 49-year-old with an income of £30,000 who has been paying into their workplace pension at this minimum rate would have £60,000 saved in it already and could have £144,000 by 2037, according to Hargreaves Lansdown. But upping your contributions is a great way of turbo-boosting your pot, especially as many employers match increased contributions. If the same 49-year-old pays six per cent into their pot and their employer matches that, they could have £164,300 by 2037 — £20,300 extra, and more than enough to cover any shortfall from the Government’s changes. This would mean paying an extra £25 into their pot per month. If this was increased to seven per cent and their employer matched it, they would have £174,400 — £30,400 more. This would cost an extra £50 a month of their pay. These figures assume the pot grows by five per cent, and also includes tax relief — for every £80 saved, the Government adds £20, if you are a basic-rate taxpayer. There are other ways to claw back money, though. The summer can be a great time to claim back any energy overpayments. The average household paying via direct debit has around £200 in credit. Budgeting apps such as Snoop can help identify areas where you are overspending. They can also set spending targets and send alerts to help you stay within budget. The apps provides weekly spending reports, too, and suggests ways to trim outlays. Also use your banking app’s “round-up” feature. This rounds up all your transactions to the nearest pound and transfers the spare change into your savings. Sun Money reporter Laura McGuire saved £390 in a year, just by doing this. And make the most of Isas, where any interest earned or profits made on investments is tax-free. You can save £20,000 a year into Isa accounts. Before you decide to invest more money in your pension, ensure you have saved enough into an emergency fund. This should cover three to six months of expenses. PARKING FINE CRACKDOWN A PRIVATE parking company is under investigation for charging drivers while they queued for petrol. Euro Car Parks, which manages more than 3,000 locations across the UK and Ireland, is being probed by the Competition and Market Authority. The CMA investigation will examine the company’s practices at petrol stations and consider whether it is fair to issue tickets to drivers queuing to use fuel pumps or other forecourt services, such as car washes. It will also analyse Euro Car Parks’ wider appeals processes. On Thursday, the CMA published an open letter to all private parking operators outlining concerns. It found that some tickets had been issued because payment was not made within five minutes of entering the car park. The CMA also made recommendations to the Government on a new code of practice it has consulted on, including that parking companies should be required to make drivers aware of their rights and improve their appeals processes. Recent analysis of government data found drivers are being handed nearly 48,000 parking tickets a day by private firms. Emma Cochrane, executive director of consumer protection at the CMA, said: “It’s time for all private parking operators to comply with consumer law or risk action from the CMA.” Euro Car Parks has been approached for comment. Laura McGuire GET WED IN A WOOD Couples could soon be able to marry anywhere from forests to beaches under plans to cut wedding costs and overhaul ceremony rules Credit: Getty Images/iStockphoto PEOPLE could legally marry in forests, on beaches or at sea under new proposals also aimed at cutting wedding costs. Some couples currently pay for two ceremonies – one that reflects their beliefs and another making their union legal. The Government said doubling up to cover different faiths would no longer be necessary. Currently, it is the venue that is licensed for weddings, but this could change to the celebrant so couples can marry in any location. The average nuptials top £20,000, with venue hire alone typically coming in at around £6,000 without catering. The Ministry of Justice said proposed changes for England and Wales would make legally-recognised religious ceremonies more accessible. Humanists could also be allowed to carry out legally-binding weddings for the first time. Safeguards would include in-person interviews to protect against forced, predatory and sham marriages, according to the MoJ. A consultation began on Thursday an runs until September 24. It has been suggested that the reforms could also boost the UK’s finances. The Law Commission estimated a three per cent increase in the number of weddings could contribute more than £238million to the economy over the next decade. Deputy Prime Minister David Lammy said: “I’m reforming archaic rules so couples have more freedom to say ‘I do’ on their own terms.” Laura McGuire Comment now