One of the “side” issues of the recent cabinet reshuffle – well actually the reasons it was so quick and messy – was the ‘loss’ of yet another pension minister. As this particular roundabout continues to turn, it is beginning to look as if this job is the poisoned chalice that nobody wants to be left with; once that dubious honour went to the Northern Ireland Secretary.

Replacing James Purnell in the hot seat as Secretary of State for Work and Pensions is Yvette Cooper, who becomes the eighth person to hold the post since June 2001. With husband Ed Balls as Secretary of State, Department for Children, Schools and Families, they seem to have us covered from cradle to grave. Perhaps we don’t need the rest of the government …

Does this matter?
You could argue that private pensions are really the preserve of the Treasury (the job Ed Balls didn’t get, because Gordon Brown was unable to unseat the present incumbent) so what does this matter?

However, what happens with both state pensions and the new Personal Accounts is very much under the purview of this department and is therefore relevant to everyone’s retirement planning.

For example, while most people know that the state retirement age for women is rising from 60 to 65 over the next decade or so, few people seem fully aware that both men and women will see their state retirement ages rising from 65 to 68 between 2024 and 2046. If that sounds a long way off, the increase from 65 to 66 will be phased in by April 2026, so anyone who is 48 now is likely to be affected.

This means that personal retirement planning is affected for a large number of people. So the lack of a single guiding mind in the Department of Work and Pensions for any sustained period of time is a major issue for us all.

Will the state pension be an important part of your income?
For anyone on a private or company pension of £24,765, the basic state pension of £95.25 a week actually represents an additional 20%. More importantly, this is expected to increase in line with National Average Earnings, from 2012; most private pensions track the Retail Prices index – which tends to increase more slowly – at best.

The married person’s pension is actually not far short of £8,000 a year, so this would represent an even higher proportion. So a delay of just one year could make quite a difference to living standards, in retirement.

Planning to retire early?
Anyone planning to retire ‘early’ – and that is probably most of us, in today’s high pressure workplace – will find that they have to create plans lasting longer than previously.

When it comes to looking after our retirement planning and investments, we have to look after ourselves and there can be little doubt that vigilance and professional advice are essential. If you are wondering what to do contact Robert Bruce Associates for individual assistance.