The Government has announced an early review of the state pension age, raising questions about whether people will need to wait longer before receiving their state pension.
While no decisions have been made yet, the review comes at a time of growing pressure on the public purse. It’s expected to look closely at the affordability of the state pension and whether the current age thresholds are sustainable.
If you’re thinking about your retirement plans, it’s worth understanding what might change and what this could mean for you. Here, Joe McGovern DipPFS, our Head of Operations and Strategy explains.
What’s being reviewed?
At present, the state pension age is 66 for both men and women. This is due to rise to 67 by 2028, and eventually to 68. The original plan is for this to happen between 2044 and 2046.
However, an early review means the Government is now reassessing that timetable. It’s widely expected that ministers could decide to bring forward the rise to age 68, possibly to as early as 2037. Some reports even suggest a longer-term rise beyond 68 may be considered, especially for those who are currently in their 30s or 40s.
Any change would be based on factors such as life expectancy, the number of people in work, and the long-term health of the economy. Ultimately, the review is about balancing the cost of the state pension with the ability of the Government to fund it over the decades ahead.
Why is this happening?
There are three key reasons behind the review:
- People are living longer – Although life expectancy has stalled in recent years, we’re still living much longer than previous generations. That means pensions are paid out for longer, increasing the cost to the state.
- Fewer people are working relative to those retired – An ageing population means fewer working-age people are paying taxes to support a growing number of retirees. That shift puts pressure on Government spending and raises difficult questions about fairness and sustainability.
- The public finances are under pressure – With ongoing pressure on the economy and rising public debt, the Government is looking for ways to manage long-term costs. Changing the state pension age is one of the tools at its disposal.
What does this mean for you?
If you’re already receiving the state pension or are close to retirement, then you will not be affected. The Government has typically protected those nearing retirement from changes of this nature.
But if you’re under 50, there’s a real possibility you may have to wait longer than expected to start receiving your state pension. That could mean you’ll need to fund a longer gap between finishing work and receiving that income something that could affect your financial plans.
The state pension is currently worth £11,973 a year as of April 2025. While it’s not designed to cover all your retirement needs, it does form a key part of many people’s retirement income. A delay in receiving it can make a real difference, especially if you’re planning to retire before state pension age.
Example: Planning Around Potential State Pension Changes
Meet Emma, aged 45, from Manchester
Emma works as an office manager and plans to retire at 65. She’s been assuming she’ll receive her state pension at 67, but recent news about potential changes has made her think again.
The numbers:
- Current plan: Retire at 65, receive state pension at 67
- Gap to fund: 2 years without state pension = £23,946
- If state pension age rises to 68: 3 years without state pension = £35,919
- The difference: An extra £11,973 to find
Emma’s response:
Rather than worry about what might happen, Emma decides to take control:
- She checks her state pension forecast online and discovers she’s on track for the full amount
- She reviews her workplace pension and finds she could comfortably increase contributions by £50 monthly
- She speaks to a financial adviser about her options and creates a flexible plan
The adviser shows Emma that an extra £50 per month from age 45 could grow to around £15,000-£20,000 by retirement, more than covering the potential shortfall.
The key insight: Small, early action can solve what looks like a big future problem.
Emma’s peace of mind: Whatever happens with state pension age changes, she’s prepared. If the changes don’t happen, she’ll have more comfortable retirement funds.
This example uses simplified assumptions for illustration. Individual circumstances vary, and investment values can fluctuate. Consider seeking independent financial advice to explore options suitable for your situation.
What should you do now?
The Government’s review may take time, but it’s wise to start thinking ahead. Here are some practical steps:
- Check your state pension forecast – Visit gov.uk/check-state-pension to see what you’re on track to receive and when. This is a useful starting point for understanding any potential shortfall.
- Review your assumptions – If you’ve assumed you’ll receive the state pension at 66 or 67, it might be worth building in a degree of flexibility to account for any potential delay.
- Build up your private pension provision – If the state pension age rises, having a strong personal or workplace pension becomes even more important. Regular contributions, even small ones, can make a significant difference over time.
- Get specific advice – Understanding how a change like this could affect your retirement plans is complex. Our advisers can help you build a plan that accounts for different scenarios and gives you confidence in your future.
If you’d like to talk through your retirement plans or explore ways to strengthen your long-term savings, our team is here to help.
