The State Pension age in the UK is set to rise from 66 to 67 starting next year, with the increase expected to be fully implemented for all men and women by 2028. This planned adjustment to the official retirement age has been legislated since 2014, with an additional increase from 67 to 68 scheduled to take place between 2044 and 2046.
Last month saw the launch of the third review of the State Pension age, which will consider future increases, taking into account factors such as life expectancy, labour market conditions, costs and sustainability. The Department for Work and Pensions (DWP) forecasts that expenditure on the State Pension will reach £146 billion in 2025/26, but this figure is expected to rise to £169bn by 2029/30.
Under the Triple Lock system, State Pensions increase annually in line with whichever is highest: average annual earnings growth from May to July, the Consumer Price Index (CPI) inflation rate in the year to September, or 2.5 per cent.
It’s crucial to note that any alterations to the State Pension age must adhere to the principle of providing people with a 10-year notice period for any changes to their retirement age – otherwise, we could see a repeat of the situation that has impacted an estimated 3.6 million women born in the 1950s.
Phoenix Insights has issued a warning that approximately three million people could experience a delay in their retirement plans if the increase in the State Pension age to 68 is brought forward, reports the Daily Record.
The most recent Department for Work and Pensions data reveals that 13 million Brits are now claiming the State Pension. Thirty-four per cent receive the New State Pension (introduced after April 2016), whilst 66 per cent are on the Basic (or Old) State Pension (introduced before April 2016).
Those entitled to the full New State Pension get £230.25 weekly, and since payments are usually made every four weeks, this totals £921. Throughout the 2025/26 financial year, annual payments will reach £11,973.
Nevertheless, not all of the 4.1 million people on the New State Pension receive the maximum amount, as it depends on National Insurance Contributions.
Brits must pay a minimum of 10 years’ worth of National Insurance Contributions (NICs) to qualify for any State Pension, and approximately 35 years for the full rate, though this can be higher if someone has been ‘contracted out’.
A person on the full Basic State Pension gets weekly payments of £176.45, or £705.80 per four-week payment period. Throughout the 2025/26 financial year, annual payments will total £9,175.40.
Patrick Thomson, Head of Research Analysis and Policy at Phoenix Insights, said: “The State Pension remains at a critical juncture with questions remaining over its long-term affordability and the future of the Triple Lock. Projections suggests there will be five million more State Pensioners in the UK by 2070 compared to just one million more people of working-age.”
Four key findings about the State Pension
Phoenix Insights found that:
- Around a fifth (18%) of adults say they could live on the state pension alone in retirement
- A third (35%) of the pre-State Pension age group (60-65yrs) have zero private pension saving
- 45% of adults expect to work beyond their State Pension age to plug gaps in savings
- 3 million people would see a delay in State Pension payments if the retirement age increase to 68 is brought forward to 2041-2043
Mr Thomson continued: “Accelerating the State Pension age could mitigate some of the cost challenge, but recent life expectancy projections are less optimistic making policy change potentially more difficult. Bringing forward the State Pension age increase to age 68 to the early 2040s would impact nearly three million people and not everyone will be able to work to a later State Pension age.
“We are expecting another State Pension age review in this parliament which should offer more clarity on the timetable of the future increase to age 68.”
He added: “It’s important that any future change to the State Pension is combined with policy interventions to support greater retirement adequacy, including enabling people to remain in work later in life and boosting pension saving through auto-enrolment.”
Future State Pension increases
The Labour Government has committed to maintaining the Triple Lock throughout its term, with the latest forecasts indicating the following projected annual rises:
- 2025/26 – 4.1% (the forecast was 4%)
- 2026/27 – 2.5% (currently on track for 4.8%)
- 2027/28 – 2.5%
- 2028/29 – 2.5%
- 2029/30 – 2.5%
