The State Pension age is set to start to rise from 66 to 67 next year, with the increase expected to be fully implemented for all men and women across the UK by 2028
The State Pension age is set start increasing from 66 to 67 next year, a change that will require millions of Brits to extend their working lives. This increase is anticipated to be fully implemented for all men and women across the UK by 2028.
This planned adjustment to the official retirement age has been legislated since 2014, with an additional rise from 67 to 68 slated to occur between 2044 and 2046.
The Pensions Act 2014 expedited the increase in the State Pension age from 66 to 67 by eight years. The UK Government also modified the method of phasing in the hike.
Rather than reaching State Pension age on a specific date, individuals born between March 6, 1961 and April 5, 1977 will be eligible to claim the State Pension once they turn 67.
It’s vital to be cognisant of these forthcoming changes now, especially if you have a retirement plan in place. All those affected by modifications to their State Pension age will receive a letter from the Department for Work and Pensions (DWP) well in advance, reports the Manchester Evening News.
Under the Pensions Act 2007, the State Pension age for both men and women will rise from 67 to 68 between 2044 and 2046.
The Pensions Act 2014 requires a regular review of the State Pension age, at least once every five years. The review will focus on the principle that individuals should spend a certain proportion of their adult life receiving a State Pension.
The UK Government has recently launched a new Pension Commission, assigned with the mission of investigating methods to boost pension savings. The commission’s findings are expected to be released in 2027.
It will delve into topics such as auto-enrolment saving rates, enhancing savings among groups like the self-employed, and a review of the State Pension age.
Dr Suzy Morrissey will submit a report on factors that the UK Government should consider in relation to the State Pension age, while the Government Actuary’s Department will prepare a report on the proportion of adult life spent in retirement.
The review of the State Pension age will take into account life expectancy, along with a range of other pertinent factors when determining the State Pension age.
Following the report, the UK Government may opt to introduce changes to the State Pension age. However, any suggested alterations would need to be approved by Parliament before they can become law.
Check your State Pension age online
Your State Pension age is the earliest age at which you can start receiving your State Pension. This might vary from the age at which you can access a workplace or personal pension.
People of all ages can use the online tool on GOV.UK to check their State Pension age, a crucial step in retirement planning.
You can utilise the State Pension age tool to check:
- When you will reach State Pension age
- Your Pension Credit qualifying age
- When you will be eligible for free bus travel – this is at age 60 in Scotland
Check your State Pension age online here.
Boosting State Pension payments
HM Revenue and Customs (HMRC) recently disclosed that since its launch last year, the new digital service has facilitated over 10,000 payments, amounting to £12.5 million, by individuals seeking to boost their State Pensions.
However, those aiming to optimise their retirement income through this contributory benefit have only a few weeks remaining to address any gaps in their National Insurance (NI) records dating back to 2006.
Typically, voluntary contributions can only be made for the past six tax years, and after the deadline of April 5 this year, the standard six-tax year limit will resume.
In 2023, the previous government extended the deadline for making voluntary NI contributions to April 5, 2025 for those impacted by new State Pension transitional arrangements, covering the tax years from April 6, 2006 to April 5, 2018.
This prolonged deadline has provided people with additional time to evaluate their options and make their contributions.
Men born post-April 6, 1951 and women born post-April 6, 1953 are eligible to make voluntary NI contributions to enhance their New State Pension.
Certain individuals may qualify for NI credits instead of having to make contributions, so they should verify and determine what is most suitable for them.
More information about making voluntary contributions can be found on GOV.UK here. Working-age individuals can also check their State Pension forecast on GOV.UK here.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, clarified: “People typically need at least 10 qualifying years of NI (National Insurance) 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.
“Plugging gaps can be quite an expensive process, so it is important to assess whether you actually need to buy back any missing years. This will depend on how many more years you plan to work, and whether you are eligible for NI tax credits, which fill the gaps, such as those who have been sick, were unemployed or took time out to raise a family or care for elderly relations.
“Plugging gaps in your record is relatively straightforward since the Government rolled out its new NI payments services in April last year – a State Pension forecast tool that has been checked by 3.7m since its launch.”
She went on to say: “People simply need to log into their personal tax account or the HMRC app to not only view any payment gaps but also check if they can plug those gaps directly through the Government’s digital channels.
“A short survey assesses the person’s suitability to pay online with those eligible to pay directly given a series of options to plug any gaps depending on when someone wants to stop working.
“Calculating whether to top up can be confusing though and ultimately there is no point paying for more years than you need because you won’t get that money back.”
Ms Haine added: “People who might need to top up include those that took a career break as well as low earners or expatriates living and working abroad.
“Remember, this deadline has been extended a couple of times in the past, which makes it more likely the Government will stick to the April cut-off point this time around. For this reason, those that think they might need to take action should start the process now.”
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