SPA increases see decline in women entering early retirement

The increase in state pension age (SPA) has seen shifts in retirement patterns according to new research, with the number of women retiring before they reach SPA falling.

The analysis, produced by Hargreaves Lansdown, explored the impact of the phased state pension age increase 10 years after its introduction in April 2010.

It showed that the rate of women leaving work at age 59-61 had almost halved, from 31 per cent in 2010 to 17 per cent currently.

Furthermore, while only 16 per cent left employment at age 63 to 65 in 2010, as many as 33 per cent of women now leave work at this time.

The research also revealed that while the number of people claiming state pension initially rose, it has been on a decline since reaching a peak of 12.96 million in November 2014.

However, there has been an overall increase with 77,500 more people claiming the state pension today compared to 2010.

Commenting on the findings, Hargreaves Lansdown senior analyst, Nathan Long, said: “The nation’s future financial health relies on having the state pension as a bedrock of retirement income come what may.

“State pension age has been creeping up to ensure this vital benefit is sustainable in the long term, but it has knock on consequences. Thousands of people are having to wait longer for their pension and a confusing roll out has left many women ill prepared for finishing work.

“The state pension is a hugely valuable benefit, buying an equivalent secure income would cost around £260,000. Perhaps as an acknowledgment of the value of the state pension, only a third of under-55s expect it to be around when they hit retirement.

“The measures have already brought a shift in retirement patterns with women tending to leave work around their new state pension age of 65 as opposed to around the age of 60 a decade earlier.”

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