The State Pension age in the UK is set to begin its rise from 66 to 67 next year, with the increase expected to be fully implemented for all men and women across the nation by 2028.
This planned change 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 stand at £146 billion in 2025/26, but this figure is projected to rise to £169bn by 2029/30.
Under the Triple Lock mechanism, State Pensions are increased each year in line with whichever is the highest out of 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 potentially face another situation similar to the one 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 to their retirement plans if the increase of the State Pension age to 68 is brought forward, reports the Daily Record.
New statistics from the Department for Work and Pensions (DWP) reveal that 13 million people are now claiming the State Pension.
Around 34 per cent receive the New State Pension (introduced after April 2016) whilst 66 per cent collect the Basic (or Old) State Pension (established before April 2016).
Recipients of the complete New State Pension obtain £230.25 weekly, and since payments are usually distributed every four weeks, this totals £921.
Yearly payments will amount to £11,973 throughout the 2025/26 financial year.
Not all 4.1m people receiving the New State Pension get the maximum sum, as it depends on National Insurance Contributions.
Brits must contribute at least 10 years of National Insurance Contributions (NICs) to qualify for any State Pension, with approximately 35 years required for the complete rate – though this may be higher for those who have been ‘contracted out’.
Those receiving the complete Basic State Pension get weekly payments of £176.45, equivalent to £705.80 per four-week payment cycle.
Yearly payments will total £9,175.40 during the 2025/26 financial year.
Patrick Thomson, Head of Research Analysis and Policy at Phoenix Insights, commented: “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.”
- 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 added: “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 rises
The Labour Government has committed to maintaining the Triple Lock throughout its tenure and the latest forecasts indicate the following projected yearly increases:
- 2025/26 – 4.1% (the forecast was 4%)
- 2026/27 – 2.5%
- 2027/28 – 2.5%
- 2028/29 – 2.5%
- 2029/30 – 2.5%
