People aged 55 and under could face a longer wait to receive their State Pension if the UK Government brings forward the next planned increase in the retirement age, according to a pensions specialist. Growing pressure on public finances could lead to the State Pension age rising to 68 earlier than currently scheduled.
Under existing legislation, the State Pension age is increasing from 66 to 67 between April 2026 and 2028. A further rise to 68 is scheduled to take place between 2044 and 2046.
Expert warns of accelerated increase
Andrew King, pensions specialist at wealth management firm Evelyn Partners, has suggested the next increase could be accelerated as future governments look for ways to manage the rising cost of State Pension payments. His comments follow confirmation that the September Consumer Price Index (CPI) inflation rate was 3.5 per cent, meaning average earnings growth of 3.9 per cent will determine the State Pension uprating for April 2027 under the Triple Lock.
Mr King said: "Double or Triple Lock, the ongoing crunch in the public finances is likely to leave future governments grappling with a soaring state pension bill unless other steps are taken to restrict it."
"For instance, we could well see the next increase in the SP age, from 67 to 68, brought forward from the scheduled 2044/46 period, in an effort to address the affordability crisis. That could catch out the cohort currently 55 or younger, who might have to work longer or rethink retirement funding."
Private savings urged
Mr King also warned that younger workers may need to increase their private pension savings rather than relying on the State Pension alone. He said: "The message for younger and middle-aged workers is that they can't rely on the state pension to provide even a rudimentary living standard in retirement, and private pension savings will only become more crucial as the years go by."
The State Pension age is gradually increasing from 66 to 67, with the exact date people qualify for payments determined by their date of birth. People born between April 6, 1960, and March 5, 1961, will reach State Pension age at different points between their 66th and 67th birthdays. The timetable includes increments of one month for each birth month, with those born between March 6, 1961, and April 5, 1977, reaching State Pension age at 67.
Concerns over retirement age changes
The Work and Pensions Committee has raised concerns about the financial impact of increasing the State Pension age, particularly for people unable to continue working until they qualify for payments. In its Transition to State Pension Age report, the cross-party group of MPs warned that more 66-year-olds could be forced to rely on working-age benefits for longer.
The Committee highlighted the difference between Universal Credit and Pension Credit, with the standard Universal Credit allowance worth around £425 a month compared with the Pension Credit minimum income guarantee of approximately £1,031 a month for a single pensioner. MPs recommended that the UK Government consult on temporarily increasing Universal Credit support for 66-year-olds, with a view to introducing additional help by the end of 2026.
The Committee also highlighted evidence from the previous increase in State Pension age, which found that the poverty rate among people in the year before reaching retirement age rose from 10 per cent to 24 per cent. It estimated that additional Universal Credit support for 66-year-olds would cost around £600 million, compared with projected savings of £10.5 billion from increasing the State Pension age to 67.
For now, the existing State Pension age timetable remains in place, and people approaching retirement can check when they will qualify for payments and obtain a forecast of their entitlement through GOV.UK.
