The State Pension age is set to start rising from from April
The third review of the State Pension age kicked off in July(Image: Alvarog1970 via Getty Images)
The State Pension age is on the up, set to climb from 66 to 67 starting from April, with the hike expected to be fully implemented for all men and women across the UK by 2028. This shift in the official retirement age has been on the cards since 2014, with another increase from 67 to 68 slated to roll out between 2044 and 2046.
The third review of the State Pension age kicked off in July, casting an eye over future increases while considering factors such as life expectancy, labour market trends, costs and sustainability. The forecasted expenditure on the State Pension for 2025/26 stands at a whopping £146 billion, but by 2029/30, the Department for Work and Pensions (DWP) predicts this figure will soar to £169bn.
Under the Triple Lock system, State Pensions get a yearly boost in line with whichever is highest: average annual earnings growth from May to July, the Consumer Price Index (CPI) inflation rate in the year to September, or 2.5 per cent.
It’s crucial to remember that any tweaks to the State Pension age must adhere to the principle of giving people a decade’s notice of any change to their retirement age – or risk sparking another situation like the one that’s impacted an estimated 3.6 million women born in the 1950s.
Phoenix Insights has issued a stark warning that around 3 million people could see their retirement plans put on hold if the State Pension age increase to 68 is fast-tracked, reports the Daily Record.
The latest DWP figures reveal that 13 million people are now claiming the State Pension. Around 34 per cent receive the New State Pension (introduced post-April 2016) whilst 66 per cent are on the Basic (or Old) State Pension (pre-April 2016).
Those on the full New State Pension currently get £230.25 weekly and as payments are typically made every four weeks, this totals £921. Annual payments are worth £11,973 over the 2025/26 financial year. However, not all of the 4.1 million people on the New State Pension receive the full amount as it’s linked to National Insurance Contributions.
People need to have paid at least 10 years’ worth of National Insurance Contributions (NICs) to qualify for any State Pension and roughly 35 years for the full rate, which can be higher if someone has been ‘contracted out’. Someone on the full Basic State Pension currently gets weekly payments of £176.45, or £705.80 every four-week payment period. Annual payments are worth £9,175.40 over the 2025/26 financial year.
Patrick Thomson, Head of Research Analysis and Policy at Phoenix Insights, said: “The State Pension remains at a critical juncture with questions remaining over its long-term affordability and the future of the Triple Lock. Projections suggests there will be five million more State Pensioners in the UK by 2070 compared to just one million more people of working-age.”
Four key findings about the State Pension
Phoenix Insights found:
- Around a fifth (18%) of adults say they could live on the state pension alone in retirement
- A third (35%) of the pre-State Pension age group (60-65yrs) have zero private pension saving
- 45% of adults expect to work beyond their State Pension age to plug gaps in savings
- 3 million people would see a delay in State Pension payments if the retirement age increase to 68 is brought forward to 2041-2043
Mr Thomson continued: “Accelerating the State Pension age could mitigate some of the cost challenge, but recent life expectancy projections are less optimistic making policy change potentially more difficult. Bringing forward the State Pension age increase to age 68 to the early 2040s would impact nearly three million people and not everyone will be able to work to a later State Pension age.
“We are expecting another State Pension age review in this parliament which should offer more clarity on the timetable of the future increase to age 68.”
He added: “It’s important that any future change to the State Pension is combined with policy interventions to support greater retirement adequacy, including enabling people to remain in work later in life and boosting pension saving through auto-enrolment.”
New State Pension payment rates 2026/27
Full New State Pension
- Weekly: £241.30 (from £230.25)
- Four-weekly pay period: £965.20
- Annual amount: £12,547
Full Basic State Pension
- Weekly: £184.90 (from £176.45)
- Four-weekly pay period: £739.60
- Annual amount: £9,614
Future State Pension increases
The Labour Government has pledged to honour the Triple Lock or the duration of its term and the latest predictions show the following projected annual increases:
- 2026/27 – 4.8%, confirmed at the Autumn Budget
- 2027/28 – 2.5%
- 2028/29 – 2.5%
- 2029/30 – 2.5%