Millions have been dealt a devastating blow with retirement analysts predicting that rapid hikes to the State Pension age “cannot be ruled out” meaning Brits will have to work longer. At present, the current state pension which dictates when most people will retire from work, is set at 66, and this is due to rise to 67 between 2026 and 2028 for those born after April 1960.
Another hike to 68 is planned for between 2044 and 2046. And now wealth management firm Fidelity International is sounding the alarm that concerns over the long-term financial viability of the triple lock means aggressive increases could take place. As the State Pension age rises each year, workers are likely to spend fewer of these years reaping the benefits of their hard work.
The State Pension increases at the start of each new tax year on April 6 and the amount it goes up is determined by the highest figure out of three factors, known as the ‘triple lock’.
The triple lock sees the State Pension go up by whichever is highest out of the consumer price index (CPI) measure of inflation (measured for September the year before), average wage growth between May and July of the previous year, or 2.5%.
In general Brits need to have 35 years of qualifying National Insurance contributions to be eligible for a full state pension which currently sits at £230.25 per week.
Typically, the State Pension age marks the earliest time people can begin receiving it and is designed to be proportional to the nation’s average lifespan, ensuring people spend an appropriate amount of time in retirement funded by the pension.
Recently Denmark passed a law raising the State Pension age to 70 by 2040 making this the highest State Pension age in the world.
Ann Widdecombe, the former Conservative Party MP and current immigration spokesperson for Reform, is now suggesting that it is “almost inevitable” Britain’s retirement age will follow a similar trajectory.
According to Fidelity’s own research, the State Pension as a proportion of gross domestic product (GDP) has surged in recent years; peaking at 5.06% of GDP by the 2023-24 tax year.
Only a handful of countries maintain a State Pension age below 60, including Sri Lanka at 55, Indonesia at 58, and Bangladesh at 59.
