The State Pension age is set to increase by one year from 66 to 67 by 2028 – and there could be even more changes to come as the UK’s finances continue to struggle
In 2026, the State Pension will rise, a change that was revealed over 10 years ago.
The fresh regulation will see the State Pension age climb by one year from 66 to 67. By 2028, this will be completely rolled out for men and women.
Whilst the alteration has been approaching for some time, it’s getting nearer, and there might even be an additional rise from 67 to 68 between 2044 and 2046. If you’re planning to retire shortly, you should ensure you’re financially ready.
Everyone impacted by modifications to their State Pension age will get a letter from the Department for Work and Pensions (DWP). The Pensions Act 2014 which lifted the State Pension age also adjusted its implementation.
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Consequently, people born between March 6, 1961, and April 5, 1977, will be entitled to claim the State Pension once they reach 67.
Chancellor Rachel Reeves last month stated a review which could witness the age being raised even higher is required to guarantee the system is “sustainable and affordable”. The Government review is scheduled to report in March 2029 and Ms Reeves said it was “right” to examine the age at which people can receive the state pension as life expectancy rises.
The state pension age is presently 66, climbing to 67 by 2028 and the Government is legally obliged to regularly review the age, reports the Express. The Chancellor told reporters: “We have just commissioned a review of pensions adequacy, so whether people are saving enough for retirement, and also the state pension age.”
“As life expectancy increases it is right to look at the state pension age to ensure that the state pension is sustainable and affordable for generations to come. That’s why we have asked a very experienced set of experts to look at all the evidence.”
The Department for Work and Pensions announced the review, which will feature an independent assessment headed by Dr Suzy Morrissey examining key factors relating to the State Pension Age Review, alongside the Government Actuary’s Department’s analysis of the most recent life expectancy projection figures.
Rachel Vahey, head of public policy at AJ Bell, commented: “An increase to state pension age from 66 to 67 is already slated to happen between 2026 and 2028. But it’s less clear what will happen after that. There is also an increase to age 68 pencilled in for 2046, but a faster increase is definitely on the cards.”
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“The first two reviews of the state pension age advocated bringing this forward, but successive governments have treated the issue like a hot potato. This latest state pension age review, however, may eventually force the government’s hand.”
She continued: “State pension benefits are one of the single biggest expenses for the Treasury and account for more than 80 per cent of the £175 billion pensioner welfare bill. Without policy intervention, state pension costs are set to spiral to nearly 8% of GDP over the next 50 years based on the current trajectory, up from 5.2% today.”
“The second state pension age review in 2023 recommended that the increase to 68 should be introduced between 2041 and 2043 to help reduce costs, although the government under Rishi Sunak opted not to commit to that timetable. However, the new Labour government may feel it needs to consider the rise to age 68 more closely, particularly if it wants to demonstrate steps toward long-term fiscal prudence.”
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, commented: “There will be many factors that need to be assessed during this review of the state pension age. One of the most important will be healthy life expectancy which according to the latest data hovers in the early 60s.”
“This means the reality is that many people will face real difficulties in continuing to work until their mid-to-late 60s and could face a sizeable income gap while they wait to receive their state pension.”
