While the change has been looming for a while, it’s drawing closer, and there may even be a further increase in the future.
State Pension age will rise in 2026 (Image: Getty)
In 2026, the State Pension will increase, a change that was announced more than a decade ago. The new rule will see the State Pension age increase by one year from 66 to 67.
By 2028, this will be fully implemented for men and women. While the change has been looming for a while, it’s drawing closer, and there may even be a further increase from 67 to 68 between 2044 and 2046. If you’re hoping to retire soon, you should make sure you’re financially prepared.
You should check whether you’ll be impacted by the change (Image: Getty Images)
All those affected by changes to their State Pension age will receive a letter from the Department for Work and Pensions (DWP).
The Pensions Act 2014 which raised the State Pension age also tweaked its phasing. As a result, people born between March 6, 1961, and April 5, 1977, will be eligible to claim the State Pension once they turn 67.
Chancellor Rachel Reeves last month said a review which could see the age being increased even further is needed to ensure the system is “sustainable and affordable”. The Government review is due to report in March 2029 and Ms Reeves said it was “right” to look at the age at which people can receive the state pension as life expectancy increases. The state pension age is currently 66, rising to 67 by 2028 and the Government is legally required to periodically review the age.
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.”
It’s possible the State Pension age will rise again in the future (Image: Getty Images)
The review was announced by the Department for Work and Pensions and will involve an independent report, led by Dr Suzy Morrissey, on specified factors relevant to the Review of State Pension Age along with the Government Actuary’s Department’s examination of the latest life expectancy projections data.
Rachel Vahey, head of public policy at AJ Bell, said: “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.
“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.
“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, said: “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.”
