How your age affects your pension

The younger you are the more impact the pension reforms will have

The government's pension reforms will be phased in over many years. This means that the younger you are, the more these changes will hit you.

I'm 28 or younger

I'm aged between 29 and 37

I'm between 38 and 46

I'm aged 47 or above

PEOPLE AGED 28 OR YOUNGER

You will face a radically different retirement system than today's pensioners.

If you are aged 27 or younger you will not be able to collect your state pension until you are 68 years old. If you are 28 already, you will get your state pension between the 67th and 68th birthday.

Having said that, raising the state pension age does not mean that you will have to work longer.

But if you want to go into early retirement, you will have to have big enough savings to compensate for the later state pension age.

There is a bright side, though: the link between increases in the state pension and average earnings will have been restored.

Currently pensions are increased in line with prices, not earnings, which means that the income gap between pensioners and the working population grows steadily.

By restoring the earnings link people retiring around 2050 will be £40 a week better off, based on today's prices, at least according to government calculations.

PEOPLE AGED BETWEEN 29 AND 37

You won't be able to collect your state pension until you are 67 years old, although if you are already 37 years old, you will get your pension between the 66th and 67th birthday.

"My dad worked till he was 71 and it's done him the world of good" In pictures

But you will benefit from the restoration of the link between the state pension and earnings. Currently pensions are increased in line with prices, not earnings, which means that the income gap between pensioners and the working population grows steadily.

And by the time you retire, you may also have substantial savings in a new low-cost National Pension Savings Scheme (NPSS).

The NPSS is to be launched in 2012 and will involve you and your employers making contributions.

The scheme is an attempt to persuade you to save more money, but you can opt-out of the NPSS.

PEOPLE AGED BETWEEN 38 AND 46

You will collect your state pension one year later than people who are retiring right now.

From 2024 you can collect your state pension once you are 66 years old - unless if you are 46 already, then you will be able to collect your state pension between the 65th and 66th birthday.

If you have an interrupted National Insurance Contributions (NICs) record, due perhaps to taking time-off to look after children or relatives, your pension will be boosted because the government has cut the number of years it takes to qualify for a full basic state pension to 30.

The government has said this will help especially women.

PEOPLE AGED 47 AND OVER

You may have the most to cheer about having seen the White Paper.

You will still be able to collect your state pension at age 65.

What is more, you will also benefit from the restoration of the link between pensions and earnings.

However, if you are very near your retirement, you may not see a huge difference, because the earnings link is not due to be restored until the next parliament.

Women, though, will see their state pension age rise from 60 to 65 between 2010 and 2020.

But this equalisation of men and women's pension age has been in the pipeline for a long time.

AGE AND THE STATE PENSION
Age on 5 April 2006	Eligible for State Pension from
46	between 65th and 66th birthday
38 - 45	66th birthday
37	between 66th and 67th birthday
29 - 36	67th birthday
28	between 67th and 68th birthday
27 or younger	68th birthday
Source: Department for Work and Pensions