GAD’s analysis supports government’s pension reforms
Published 15 November 2024
The Government Actuary’s Department (GAD) has published its analysis of the government’s proposed pension reforms. The analysis supports the government’s claim that the reforms will make the pension system more sustainable in the long term.
The government’s proposed reforms include:
- Increasing the state pension age to 68 by 2039.
- Linking the state pension age to life expectancy so that it increases in line with people living longer.
- Reducing the amount of tax relief that higher earners can claim on their pension contributions.
The GAD’s analysis found that the reforms will:
- Save the government £16 billion a year by 2060.
- Increase the proportion of people who can afford to save for a pension.
- Reduce the risk of people running out of money in retirement.
The GAD’s analysis also found that the reforms will have a small impact on the incomes of some pensioners. However, the government has said that it will provide support to those who are most affected.
The government’s pension reforms are due to be introduced in 2026. The GAD’s analysis provides further evidence that the reforms are necessary to ensure the sustainability of the pension system in the long term.
What do the proposed reforms mean for you?
The impact of the proposed reforms will vary depending on your individual circumstances. However, the following are some general points to bear in mind:
- If you are under the age of 56, you will be affected by the increase in the state pension age.
- If you are a higher earner, you will be affected by the reduction in tax relief on pension contributions.
- If you are already retired, you will not be affected by the proposed reforms.
The government has said that it will provide support to those who are most affected by the reforms. For example, people who are close to the new state pension age may be able to claim a transitional payment.
What should you do next?
If you are concerned about the impact of the proposed reforms, you should speak to a financial adviser. A financial adviser can help you to assess your individual circumstances and make informed decisions about your retirement planning.
GAD’s analysis supports government’s pension reforms
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