Five million individuals may face an extended wait for their state pension, with plans suggesting a potential delay of up to a year, according to reports. The current schedule outlines a gradual increase of the retirement age to 68 between April 2044 and April 2046. Nonetheless, the Conservative government has indicated a commitment to advancing this timeline to reach age 68 by 2037, up to seven years ahead of the original plan.
A review of the state pension age was initiated by the Labour party last year, and although no definitive decision has been announced by ministers, a report in The Times indicates that Treasury officials have informed the Office for Budget Responsibility that the government’s current stance is to raise the state pension age to 68 between 2037 and 2039, deviating from the legislated increase set in the Pensions Act 2007.
The Office for Budget Responsibility reportedly stated that the Treasury confirmed this shift in policy, contradicting the previously established legislation on pension age. However, in response, a Treasury spokesperson refuted these claims, asserting that the law still stands to raise the State Pension age to 68 in 2044, with the initiation of the third review of the state pension age in July 2025 as required by law.
Accelerating the rise in pension age would impact approximately five million individuals aged between 49 and 55, necessitating an additional year of work or wait before becoming eligible for their state pension, resulting in an estimated loss of £12,500. This proposed change could potentially save the government around £6 billion annually starting from 2037, compared to the current timetable.
Catherine Foot, director of the Standard Life Centre for the Future of Retirement, highlighted the significance of the state pension as a vital component of retirement income for millions, emphasizing the delicate balance the government must strike in ensuring affordability while addressing the longevity of the population. She noted that the current pressure is disproportionately affecting those least equipped to adapt to the evolving pension age requirements.
Former pensions minister Ros Altmann cautioned against the impact of raising the pension age on the most vulnerable individuals, advocating for alternative policy measures such as reforming the triple lock and adjusting the number of years needed for a full State Pension. Similarly, Sir Steve Webb, another former pensions minister, expressed expectations within the government for an earlier implementation of the age increase, potentially leaving many individuals without anticipated entitlements. Webb urged clarity from ministers on this matter in the near future.
