Plans unveiled recently could mean that millions of individuals may be faced with having to pay more into pension schemes and have to work longer until they are able to draw on their pensions. This could mean that homeowners over 55 years old may need to look intoschemes for to supplement their pension incomes.
This could affect many people including those working in schools, hospitals, care centres and any other civil servant positions.
Using Equity Release to Make Up the Difference
The reason for the change is mainly due to a state pension deficit of £30billion. The new plans have been called “nothing less than robbery” by critics, but the Government has already revealed that contribution increases are on the way, while looking into ways to look after those who are not very well paid.
Typically, the career average schemes only benefit people who have had a consistently high wage throughout their careers. It is expected that public sector staff will have to contribute another three percent into their pension, and will be unable to receive it until the age of 65, which keeps in line with state pension age, rather than 60 which has been the “norm” for many people. Some may have to consider equity releases schemes to help them out cash wise until they can draw on their pension.
It is thought the new scheme may see the likes of teachers, NHS workers and civil servants taking strike action, regardless of the fact that some commentators have cautiously accepted the plans, highlighting the possibility that the Government could have taken much tougher steps.