The outcome of the UK Government’s second review of the State Pension age is due to be published before the deadline on May 7, 2023. This latest review into the official age at which someone can retire, now 66 for both men and women, launched at the start of last year and is considering whether the rules around pensionable age are appropriate, based on the latest life expectancy data and other evidence.
State Pension age is regularly reviewed to make sure that it is affordable and fair as people are living longer and spending a greater proportion of their adult life in retirement than in previous years. Two further increases currently set out in legislation indicate a gradual rise to 67 for those born on or after April 5, 1960 and a rise to 68 between 2044 and 2046 for those born on or after April 5, 1977.
However, new reports suggest that it could rise to 68 by the end of the 2030s, affecting everyone currently aged 54 and under.
The Department for Work and Pensions (DWP) said that no decision has been taken on changes to the State Pension age.
The Sun reported earlier this week that people born in the 1970s and later may be told they must work for longer as early as the March Budget - ahead of the planned publication of the State Pension review.
Pension experts said the UK Government faces a “tricky balancing act” in supporting an ageing population.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown said: “The UK Government faces a tricky balancing act with the State Pension - we have fewer working age people supporting an increasing ageing population and costs are enormous.
“However, we also have to face the very real prospect that many people simply are not well enough to work until age 68. Added to this, rapid increases in State Pension age have disrupted people’s financial planning.
“With the debate around the Triple Lock continuing to rage we need to have a proper thorough review of the State Pension to give people more certainty over how and when it is paid so they can plan ahead.”
Caroline Abrahams, charity director at Age UK, said: “At Age UK we feel strongly that there is no justification for raising the State Pension age at the moment, especially as we know that the people who will lose out the most are those unable to work due to ill health and caring responsibilities, as well as anyone who becomes unemployed in mid-life and then finds it impossible to get another job, due in part to a lack of training opportunities as well as rampant ageism in the labour market.
“As things stand, any decision by the UK Government to make today’s 50-somethings wait longer for their State Pension will consign hundreds of thousands of people to a difficult and impoverished later life.”
A DWP spokesperson said: “No decision has been taken on changes to the State Pension age.
“The Government is required by law to regularly review the State Pension age and the second State Pension Age Review is currently considering, based on a wide range of evidence including latest life expectancy data and two independent reports, whether the rules around state pension age remain appropriate.
“The review will be published early this year.”
State Pension Triple Lock
The UK Government recently confirmed that the Triple Lock will be used to uprate the State Pension next year. This guarantees that State Pensions increase by September’s inflation figure, wages or 2.5% - whichever is higher.
The guarantee means that retirees are heading for a 10.1% increase to the State Pension from April:
- Full New State Pension weekly rate: £203.85 (from £185.15), £815.40 every four weeks
- Basic Old State Pension (Category A or B) weekly rate: £156.20 (from £141.85), £624.80 every flour weeks
What will the State Pension age review consider?
The review will consider a wide range of evidence, including:
- Examining the implications of the latest life expectancy data
- Providing a balanced assessment of the costs of an ageing population and future State Pension expenditure
- Consider labour market changes and people’s ability and opportunities to work over State Pension age
- Developing options for setting the legislative timetable for State Pension age that are transparent and fair
The Pensions Act 2014 requires the UK Government to regularly review State Pension age, and in accordance with law, this latest review must be published by May 7, 2023.
With all these proposed changes it can be tricky for people to know exactly when they will qualify for State Pension and be able to retire.
Fortunately, the UK Government has provided a free and easy to use online tool which gives an exact date for State Pension qualification, just by entering your gender and date of birth.
The tool provides information on when the user will:
Reach State Pension age
Qualify for Pension Credit
Be eligible for free bus travel - which is 60-years-old for everyone in Scotland
How to use the Pension Age tool
- Choose whether you are looking to calculate your State Pension age or bus pass age - you can do one, then check the other
- Once the State Pension age option is selected, input your date of birth
- Next, select whether you're a man or woman
- The final screen reveals the exact date that you will reach State Pension age
It’s also possible from this screen to get information on when you could become eligible for Pension Credit, get a pension forecast or receive other State Pension information.
Check your State Pension age on the GOV.UK website here.
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