Malcolm Wicks, the former Labour pension’s minister, has warned that it is an injustice to not take into account the life expectancy of the different social classes and that by raising the state pension age to 66 by 2020 and then to 68 in the future, means many will never see their state pension.
Mr Wicks says that there is a higher portion of those from the lower social classes that die before they reach age 65. Around 19pc of these are men and a staggering 10pc of women from the lower social classes die before the age of 60.
If you have accumulated a pension and are thinking about taking the benefits early then talk to an independent adviser about the options available to you. If an annuity is considered the best option for you then make sure you or your adviser use the ‘open market option’ and shop around to find the best annuity rates.
If you have any lifestyle or health conditions, such as smoking or you are on prescribed medication for certain health conditions then make sure you check with the specialist annuity providers that sell enhanced and impaired life annuities. If your life expectancy is affected you could qualify for higher annuity rates.
If you do not require income from your pension then there are massive tax advantages by not taking any benefits from the pension. It means if you die before taking any pension your whole pension fund can be paid to your estate free of any tax.
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