The State Pension age in the UK is set to start rising from 66 to 67 next year, with the increase expected to be completed for all men and women across the country by 2028
The UK’s State Pension age is set to start rising from 66 to 67 starting next year, with the increase expected to be fully implemented for men and women by 2028. This adjustment to the official retirement age has been enshrined in UK law since 2014, and a subsequent increase from 67 to 68 is planned to take effect between 2044 and 2046.
The Pensions Act of 2014 expedited the elevation of the State Pension age from 66 to 67 by eight years. The UK Government also modified the phasing of the State Pension age increase, meaning that instead of reaching State Pension age on a specific date, individuals born between March 6, 1961, and April 5, 1977, will become eligible to claim the State Pension once they turn 67.
It’s crucial to be cognisant of these impending changes, especially if you have a retirement strategy in place. All those impacted by alterations to their State Pension age will receive a notification letter from the Department for Work and Pensions (DWP) well ahead of time. As per the Pensions Act 2007, the State Pension age for both men and women will see a further increase from 67 to 68 between 2044 and 2046. For money-saving tips, sign up to our Money newsletter here
The Pensions Act 2014 mandates a regular review of the State Pension age at least every five years. These reviews will be guided by the principle that individuals should spend a certain portion of their adult life receiving a State Pension, reports The Daily Record.
The state pension age in the UK, currently on track to increase to 68, is set for a review before this decade concludes. Initially, the Conservative government had scheduled this review for two years after the general election, which would have been in 2026.
The review will take into account life expectancy and other pertinent factors when determining the State Pension age. Following the review, the UK Government may choose to make alterations to the State Pension age.
However, any suggested changes must receive parliamentary approval before they can be enacted into law. This is the earliest age at which you can begin receiving your State Pension, which might differ from the age at which you can access a workplace or personal pension.
Boosting State Pension payment
Regarding enhancing State Pension payments, HM Revenue and Customs (HMRC) recently disclosed that more than 10,000 payments totalling £12.5 million have been made through the new digital service to boost State Pensions since its inception last year. However, those aiming to maximise their retirement income through the contributory benefit only have a few weeks remaining to fill any gaps in their National Insurance (NI) records dating back to 2006.
The period in which individuals can make voluntary National Insurance contributions has expanded beyond the regular six-year limit. The past government extended the window, allowing for retrospective payments covering from April 6, 2006 to April 5, 2018 and now right up until April 5, 2025 under new State Pension regulations.
This extension offers more time for people to determine their best approach and make additional contributions if necessary. Those eligible for these top-ups are men born from April 6, 1951 and women from April 6, 1953 onwards, which could enhance their eventual New State Pension amount.
It’s possible that National Insurance credits might be a preferable option over contributions for some, hence reviewing the available routes is crucial. Detailed information on how to make voluntary contributions can be found on the GOV.UK website here.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners—an online investment service—highlighted the significance of NI contributions for pension entitlements: “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 service in April last year – a State Pension forecast tool that has been checked by 3.7m since its launch.”
She added: “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 further commented: “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.”
