Many people view 65 as a landmark birthday – the milestone when they cross into retired life. But, in fact, it is no longer the official state pension age in the UK. This increased to 66 between the years of 2018 and 2020, and is set to rise further in the future.
That doesn’t necessarily mean you won’t be able to retire until your mid-to-late 60s. As we explain in our pensions guide, the state pension is only supposed to support a minimum standard of living in retirement.
This means most retirees will also have a private pension (such as a workplace pension or a SIPP) to supplement what they receive from the government. Under current rules, you can access your private pension from age 55, although this is set to rise to 57 from April 2028.
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Despite this, the state pension remains an important part of most savers’ retirement strategy. For 24% of savers, it is the only source of income they will have once they quit the workplace, according to research from financial services company SunLife.
We take a closer look at when you can expect to receive your state pension based on your age. Plus, what does a rising state pension age mean for savers and the UK economy?
When will you get your state pension?
While the state pension age is currently 66, it is due to go up a couple of times over the next twenty years. The state pension age will rise to 67 between 2026 and 2028, and again to 68 between 2044 and 2046.
Things might not end there either, with an ageing population putting a strain on the taxpayer.
Figures published by the Office for National Statistics show that the number of people at state pension age is projected to increase by 1.7 million by 2032 – a 14% increase. This takes into account the planned increase in the state pension age to 67. The number of children is expected to decrease by more than 6% over the same period.
“Whilst more people living longer should be something to be celebrated, a growing pensioner population puts more pressure on public finances to fund state pensions and provide care in older age,” said Rachel Vahey, head of public policy at investment platform AJ Bell.
“The ratio of working people to pensioners has to at least remain stable to make sure sufficient taxes are rolling in to help pay for these burgeoning costs. But with a falling birth rate that ratio looks fragile,” she added.
A report published by the International Longevity Centre last year warned the state pension age may have to rise to 71 by 2050 to ensure there are enough people left in the workforce to keep funding the retirement benefit.
Meanwhile, the London School of Economics published a separate report which argued the state pension age should be increased to 68 “as soon as is possible” rather than waiting until 2044-2046.
A quick and simple way to check your retirement age is to use the tool on the government website. Bear in mind that the result you get today could change in the future if the government introduces new legislation.
Why is the state pension age rising?
The basic state pension was introduced in 1948, three years after the end of the Second World War. Retirement age was set as 60 for women and 65 for men.
At the time, most pensioners were only expected to live for a few years after reaching state pension age. However, as living standards have improved, life expectancies have stretched, meaning some people are now spending up to a third of their life in retirement.
In a 2023 review, the Department for Work and Pensions pointed out that men born in 1951 were expected to live to 76 and women to 81. Meanwhile, men born in 2020 are expected to live to 87 and women to 90.
This means the state pension is becoming increasingly expensive for the government to fund. Estimates from the Office for Budget Responsibility suggest the state pension cost around £125 billion last year (2023/24 tax year).
The rate of inflation hasn’t helped matters recently. Each year, the amount of state pension that retirees receive increases in line with inflation, wage growth or 2.5% – whichever measure is highest. This ‘triple lock’ helps protect pensioners against the rising cost of living, but it is expensive for the taxpayer. For example, those who qualify for the full new state pension will see their annual total increase by £470 from April 2025.
When all these factors are considered, it is perhaps unsurprising that the state pension age is rising. However, continually pushing retirement back for thousands of savers isn’t a quick fix either. The injustice suffered by the Waspi women in recent years is just one example of the problems that can come with changing the system.
What risks are associated with a rising state pension age?
An ageing workforce isn’t ideal from a health or efficiency perspective, and could bring problems as the state pension age continues to go up.
“The higher the state pension age, the more individuals will struggle to stay in work. This could be because of their health, a physically or mentally taxing job or caring responsibilities for elderly parents,” said Steven Cameron, pensions director at financial services company Aegon.
He added: “We’re already seeing increasing numbers of over 50s exiting the workforce due to ill-health. An ever-rising fixed state pension age could become increasingly divisive and out of sync with today’s flexible private pensions world.”
Ill health isn’t the only reason older employees dial back their working hours, though. Many pensioners play an important role in the economy as providers of free childcare.
“Our research shows that 59% of grandparents are relied upon to provide free childcare for their grandchildren, saving families a combined £90 billion in childcare costs,” said Mark Screeton, chief executive at SunLife.
“If the state pension age were to rise [further or more quickly], it could have a knock-on effect on families across the UK who will no longer be able to rely on grandparents to help out as they themselves could still be working,” he added.
Finally, increases to the state pension age will leave households reliant on their private pension savings for longer, if they decide to quit the workplace before retirement age.
This comes at a time when many savers are already struggling with a pension shortfall thanks to the higher cost of living. A study from Phoenix Group last year showed that a quarter of adults never expect to retire. Meanwhile, others are having to come out of retirement for fear of running out of money before they die.
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