The State Pension age is due to rise next year, and the increase is expected to be fully implemented for all men and women across the UK by 2028
Many people will see the State Pension age go up soon(Image: Getty Images)
The State Pension age is set to increase from 66 to 67 next year, with the change expected to be fully implemented for all men and women across the UK by 2028. This planned change to the official retirement age has been in place since 2014, with a further increase from 67 to 68 set to take effect between 2044 and 2046.
The Pensions Act 2014 fast-tracked the rise in the State Pension age from 66 to 67 by eight years. The UK Government also tweaked the way the increase in State Pension age is phased in.
Rather than reaching State Pension age on a specific date, people born between 6 March 1961 and 5 April 1977 will be eligible to claim the State Pension once they reach 67. It’s vital to be clued up about these looming changes now, especially if you’ve got a retirement plan sorted.
Changes to the State Pension age policy took place in 2004(Image: Getty Images)
Everyone impacted by changes to their State Pension age will get a letter from the Department for Work and Pensions (DWP) well in advance. Under the Pensions Act 2007, the State Pension age for both men and women will go up from 67 to 68 between 2044 and 2046, reports the Daily Record.
The Pensions Act 2014 requires a regular review of the State Pension age, at least once every five years. The review will focus on the idea that people should be able to spend a certain chunk of their adult life receiving a State Pension.
The UK Government has recently launched a new Pension Commission, tasked with investigating ways to boost pension savings, with its findings due to be published in 2027. The commission will delve into topics such as auto-enrolment saving rates, boosting savings among groups like the self-employed, and a review of the State Pension age.
Dr Suzy Morrissey will deliver a report on factors that the UK Government should consider regarding the State Pension age, while the Government Actuary’s Department will put together a report on the proportion of adult life spent in retirement. The review of the State Pension age will take into account life expectancy, along with a range of other relevant factors, when determining the State Pension age.
In light of the review’s findings, the UK Government may choose to make changes to the State Pension age. However, any suggested changes would need to gain approval from Parliament before becoming law.
Check your State Pension age online
Your State Pension age is the earliest age at which you can begin receiving your State Pension. It might differ from the age at which you can access a workplace or personal pension.
People of all ages can utilise the online tool available on GOV.UK to check their State Pension age, an essential step in planning for retirement.
You can use the State Pension age tool to check:
When you will reach State Pension ageYour Pension Credit qualifying ageWhen you will be eligible for free bus travel – this is at age 60 in Scotland
Check your State Pension age online here.
Boosting State Pension payments
Some people could boost their State Pension payments(Image: Getty Images)
HM Revenue and Customs (HMRC) recently revealed that over 10,000 payments totalling £12.5 million have been made by individuals via the new digital service to enhance State Pensions since its inception last year. However, those eager to maximise their retirement income through the contributory benefit only have a few weeks left to fill any gaps in their National Insurance (NI) records dating back to 2006.
Typically, people can only make voluntary contributions for the previous six tax years, and after the April 5 deadline this year, the standard six-tax year limit will be reinstated. In 2023, the previous government extended the deadline for making voluntary NI contributions to April 5, 2025 for those affected by new State Pension transitional arrangements, covering the tax years from April 6, 2006 to April 5, 2018.
This extended deadline has provided people with more time to consider their options and make their contributions. Men born after April 6, 1951 and women born after April 6, 1953 are eligible to make voluntary NI contributions to increase their New State Pension.
Some people may be entitled to NI credits instead of having to make contributions, so they will need to check and decide what is best for them.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, stated: “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 services 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 added: “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.”