Pension £1 change alert for anyone in their 50s and 60s as 'there's still time'

Pension £1 change alert for anyone in their 50s and 60s as 'there's still time' The Government has announced a major change to the state pension People in their 50s and 60s have been urged to look over their pension pots as the Government makes major changes to the state pension. A retirement expert has urged people to "understand their own responsibility" to save for their later years. Many people in their midlife may be re-considering their pension plans after Labour recently announced it would change the triple lock. Prime Minister Andy Burnham told the Labour Party conference that from 2030, the average earnings part of the triple lock would be removed. Hannah Martin, pensions expert and founder of Rich Retiree, said people often have a poor understanding of the pension rules. She said: "There needs to be greater education in pensions in general. Too many people are unaware of how much state pension they will receive and when, whether they have enough National Insurance contributions to qualify for the full pension and if not, whether it's worth buying voluntary National Insurance years." You typically need 35 years of NI contributions to get the full new state pension, which currently pays £241.30 a week, or around £12,550 a year. Ms Martin said there is an even more basic issue people often don't bear in mind: "More importantly, people need to understand their own responsibility in saving for their retirement, how much they might need to live on, and how they can reach that figure." Every £1 counts She urged people to think about how paying into a pension can pay dividends over time. Ms Martin said: "We have little control over decisions the Government makes about the state pension, but we can ensure that we have enough to cover the lifestyle we want by taking action ourselves. "Thanks to a combination of tax relief and compound growth, every £1 you invest in your pension has the potential to work hard for your retirement. Even someone in their 50s or 60s still has time to make a difference to their pension pot if they make it a priority." It won't be enough She said that auto-enrolment has been a positive step in getting more people saving into their pensions, yet "on its own it's unlikely to build a big enough pot for most people". Under auto enrolment, if you work for a company, you are automatically enrolled into a pension scheme. You also pay in a minimum of the equivalent of 8 per cent of your earnings above £6,240 a year into the pot. This is often made up of a 5 per cent contribution from the worker and a 3 per cent contribution from the employer. Ms Martin emphasised the need for better awareness when it comes to saving for retirement. She said: "Just a small amount of financial education, including the power of compound growth if people invest in pensions early in their working life, could make a significant difference to engagement levels and more adequate saving for retirement." Other state pension changes Two other changes to the state pension are coming up - one taking place right now: - State pension age increase - The age you can access your state pension is increasing from 66 to 67. This is happening in stages, between April 2026 and April 2028 - New tax exemption - The Government has said it is bringing in a new policy, yet to be added to the books, so that people whose only income is the state pension without increments do not pay income tax on their payments. This will be in place by next April, when the full new state pension will rise beyond the £12,570 personal allowance, the most you can earn each year without paying income tax.