The decision to bring forward the rise in the State Pension age to 68 will be delayed until after the 2024 general election, the government confirmed today.
At present, the State Pension age for both men and women is 66, and will rise to 68 from 2044, but there were reports that the government planned to bring the increase forward to as early as 2035. You can also read more in our article How the State Pension works.
Mel Strike, work and pensions secretary, announced the delay today to MPs in Parliament, when he updated them on the latest State Pension age review.
A decision on whether to bring forward the rise in the State Pension age is now expected to be made in 2026. The announcement follows reports that plans to bring forward the State Pension age rise would be delayed amid concerns about civil unrest if the State Pension age rise is brought forward. The last week has seen a series of strikes and riots in France following President Emmanuel Macron’s plan to increase the retirement age from 62 to 64.
The current review of the State Pension age by Baroness Neville-Rolfe considers which factors should form part of any increase, including preventing Britons from spending more than a third of their adult life in retirement.
Alice Guy, head of pensions and savings at interactive investor, said: “Today’s reported decision to shelve plans to raise the State Pension age more quickly comes after sad news that life expectancies are currently falling rather than rising.
“The State Pension age is closely linked to life expectancies. The regular report into the State Pension age is due out any time soon and its recommendations are based on us spending an average of one-third of our lives in retirement.
“It’s a sad fact that life expectancies are falling in Britain for a whole host of reasons and it’s difficult for the government to justify raising the State Pension age more quickly.
“Not only are life expectancies slightly falling, reducing by seven weeks for men between 2017 to 2020 (ONS figures), they also vary widely around the country with life expectancies three years lower in the North East compared with the South East (ONS figures) and are also often linked to income level. It’s also a sad reality that those with chronic health conditions often live for less time in retirement.”
At present, the State Pension age will increase to 67 for those born on or after 5 April 1960 between 2026 and 2028. Between 2044 and 2046, there will be a gradual rise to 68 for those born on or after 5 April 1977. Think tank the Institute Fiscal Studies (IFS) reported that every year that the government delays the raise the age to 68 after 2037 would cost the Treasury between £8bn and £9bn.
The government is required by law to review the State Pension age every six years and the next review will be published by May 7, according to the Department for Work and Pensions. A recent report found life expectancy for retiring Britons is now two years lower than when the government last reviewed the state pension age in 2017.
From 6 April, State Pension payments will increase by 10.1% in line with the rising cost of living. Read more about why pensioners are receiving a record-breaking increase in the State Pension in our article What is the pension triple lock?
That means the full flat rate State Pension will be worth £203.85 a week (up from £185.15) and £156.20 a week (up from £141.85) for the full basic State Pension (for those who reached State Pension age before April 2016).
Where to seek further help
The State Pension often forms the bedrock of people’s retirement income. To find out when you’ll receive your State Pension, you can use the government’s State Pension age calculator here. Read more in our article How can I get a State Pension forecast?
If you’re 50 or over, starting to plan your retirement, and have a defined contribution pension, you can get free guidance on the options available to you from the Government’s Pension Wise service. However, if you want personal recommendations or advice about your specific circumstances, you can find a local financial advisor on VouchedFor or Unbiased, or for more information, check out our guides on How to find the right financial advisor for you or How to get advice on your pension.
If you’re considering getting professional financial advice, Aviva is offering Rest Less members a free initial consultation with an expert to chat about your financial situation and goals. There’s no obligation, but if they feel you’d benefit from paid financial advice, they’ll go over how that works and the charges involved.