Some workers could face a year without income protection insurance as a result of the Government’s decision to bring forward the State Pension increase to 68.
The Government’s decision to speed up the increase in the State Pension age could cause problems for many people with income protection.
Last week, work and pensions secretary David Gauke announced that the increase in the State Pension age – from 67 to 68 – is being brought forward and will now be phased in between 2037 and 2039.
This change could leave people with income protection insurance facing a one-year gap in cover between when their benefits end and when they can start claiming their State Pension.
Aviva has warned that a change in the law may be required before some income protection schemes recognise the increase in the State Pension age. That law change could take several years.
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Make sure you’re covered
The insurer has announced that it will pay group income protection benefits up to the age of 68 for people affected by the change in the State Pension age, with the additional cost being absorbed by Aviva’s current pricing.
But, anyone with an income protection policy should review it to make sure they will be covered when the State Pension age increases.
“A lot of people have policies they let sit there and they don’t review regularly enough, and they become inappropriate,” Michael Aldridge, innovation director at London and Country Mortgages, told FT Advisor.
Many people will have set an age at which their income protection policy benefits end when they took out the policy.
In light of the increasing State Pension age it is worth checking your policy and seeing if you can amend the end date.
If you don't yet have any insurance, here are three ways you can protect your income.
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