Have you considered at what age you will be able to claim your state pension?

Starting from today, 6th April 2010, if you are under the age of 60 and a women, you can no longer expect to retire at the age of 60.

In fact if you are younger than 55 you can expect instead to retire at 65 and the younger you are, the longer you can expect to work.

By 2046, those retiring and collecting their hard earned state pension will be at least 68 and that's assuming the law doesn't change again before then! The now certain general election could see these changes being implemented even faster under plans by some of the political parties.

This increasing pension age will certainly see a rise in the number of people needing to retire due to ill health early and unable to claim their pensions. Income Protection Insurance (aka Permanent Health Insurance) is designed to cover the gap between an early retirement and the age where you are entitled to collect your state pension. This assumes that your policy is taken to cover you up until this age and for those who already have policies which didn't take these pension changes into account, its something that should be reviewed urgently.

It is the whole idea behind Income Protection Insurance; The policy will pay you a monthly benefit if you are unable to work due to ill health and will keep paying either until you are able to return to work or until you designated end age.

The policy is essentially covering the rest of your working life up until the point where your normal pension should kick in. But only if you have set your policy up to cover until this age!

In terms of price, the difference between covering someone until age 65 and age 68 is relatively minor but the shortfall you could experience could be huge! (At £1000/month benefit that's a £36,000 shortfall!)

If you would like to calculate your estimated state pension age, the Governments website direct.gov.uk offers a handy calculator: State Pension Age Calculator

Insurance Glossary

Insurance Jargon BusterInsurance Jargon Buster - A Plain English Guide

Like with most subjects, insurance comes with its own language which can include its own confusing terminology. Our Jargon buster aims to help you clarify what some of the terminology you might find on our website means so that you can fully understand the policies and covers you are considering.

Server: Four Horsemen