The UK government is set to raise the State Pension age from 66 to 67 starting next year. This change will be fully implemented by 2028 and will affect both men and women born between March 6, 1961, and April 5, 1977. Looking further ahead, the State Pension age is scheduled to increase again to 68 between 2044 and 2046.
These changes are part of ongoing adjustments to ensure the pension system remains sustainable as people live longer. The government is required by law to review the State Pension age at least every five years. The next comprehensive review, initially planned for 2026, will reassess the move to age 68.
It will take into account recent challenges like the COVID-19 pandemic and inflation, which have introduced uncertainty into life expectancy and labor market trends. Any future adjustments to the State Pension age will require parliamentary approval before becoming law.
Pension age adjustments and impact
The Department for Work and Pensions (DWP) will notify affected individuals well in advance of the changes, allowing time to adjust retirement plans. Many people also need to review their National Insurance (NI) records to maximize their State Pension entitlements. HM Revenue and Customs (HMRC) has facilitated over 10,000 payments totaling £12.5 million through a new digital service.
This allows individuals to fill gaps in their NI contributions dating back to 2006. Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, said: “People typically need at least 10 qualifying years of NI contributions to receive any state pension at all and at least 35 years to receive the full new State Pension – though they don’t need to be consecutive years.”
She cautioned that plugging gaps can be costly and advised individuals to carefully assess their circumstances. This includes checking eligibility for NI credits that cover periods of sickness, unemployment, or caregiving.
Despite these reforms, the State Pension alone is unlikely to provide a comfortable retirement income. The full new State Pension currently stands at £11,973 annually, which falls short of the £14,400 estimated as necessary for a minimum retirement lifestyle for a single person. This gap highlights the importance of supplementing the State Pension with workplace or personal pensions and other savings.
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