Britons over 50 have been urged to save an extra £75 a month to cover a longer wait for the state pension, as the government considers raising the state pension age to 68 earlier than planned. According to analysis from Quilter, a retirement specialist, workers may need to bridge a gap of up to seven years without state pension income if the age increase is brought forward.
State Pension Age Could Rise to 68 by 2037
Office for Budget Responsibility (OBR) documents indicate that the state pension age increase to 68 could be accelerated by seven years, meaning many workers would face a longer period without government support. The change is driven by an aging population, rising life expectancy, and falling birth rates, which widen the gap between claimants and working-age taxpayers. Additionally, the triple lock—which guarantees annual increases based on the highest of inflation, earnings growth, or 2.5%—makes the state pension increasingly expensive.
How Much to Save: £50 for 49-Year-Olds, £75 for 55-Year-Olds
Analysis shows that individuals aged 49 would need to save just over £50 a month after tax relief to cover one year of projected state pension income during the additional waiting period. For those aged 55, the required monthly contribution rises to approximately £75 to achieve the same outcome. These figures are based on several assumptions: the saver is a basic-rate taxpayer living in England, receives standard pension tax relief, achieves annual investment growth of 5%, and the state pension increases by 2.5% annually. When the fund is accessed, the model assumes 25% is withdrawn tax-free, with the remaining 75% subject to basic-rate tax.
Expert Advice: Start Early to Build Retirement Savings
Adam Cole, retirement specialist at Quilter, commented: "Rather than relying solely on Government provision, individuals should view developments like this as a reminder of the importance of building their own retirement savings." He added: "While no one welcomes changes to the goalposts, these examples highlight the power of starting early. Small, regular pension contributions, combined with tax relief and investment growth over time, can provide valuable flexibility and help reduce dependence on an increasingly stretched state pension system."
Impact on Workers and Next Steps
The potential change has sparked concerns among millions of Brits. The analysis suggests that making small financial adjustments now can help mitigate future income gaps. Workers are encouraged to review their pension plans and consider increasing contributions to ensure they are prepared for a longer wait before receiving the state pension. The advice comes as part of broader warnings about the sustainability of the state pension system, with experts urging individuals to take proactive steps to secure their retirement income.
