From 6 October 2020, you must be 66 or over to claim the state pension – what is the correlation between state pension age and employment rates?
05 October 2020
In order to claim the state pension, from 6 October 2020, individuals must have reached their 66th birthday. Anybody below that age, from that date, will not be able to access it.
The State Pension Age (SPA) for women has increased from 60, back in March 2010, to 65, in October 2018, but from 6 October 2020, both men and women must be 66 prior to being granted access to their state pension.
The Institute for Fiscal Studies (IFS) has released a report, which observes the changes in state pension age and how that has affected rates of employment. It also looks at the fact that, from 2026, more changes will take place, and the state pension age will increase from 66 to 67, over a period of two years, which will impact anyone born in, or after, April 1960. Due to the fact that employment rates have increased over the course of the last ten years, the reform could potentially push up the employment rates of 66-year olds in the future.
Research that has been carried out in the past highlights the fact that the increase in the state pension age from 60 to 62 for women actually led to an additional 6 in 100 women aged between 60 and 61 being in paid employment. Additionally, the employment rate of 65-year old women has increased significantly over the last two years, as they have no longer been able to claim the state pension. It was 21% in the third quarter of 2018, but by the second quarter of 2020, it was 35%. This will have been influenced by the outbreak of coronavirus, which will mean that the employment rate included individuals placed on furlough from their job, but even prior to the pandemic, in quarter one of 2020, the rate of employment of 65-year old women was already 35%. It is these figures that lend themselves to the suggestion that further reform could increase the employment rate of 66-year olds, as the state pension age evolves once again.
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