Big changes on the horizon for the UK state pension! Starting next year, the retirement age will gradually rise from 66 to 67, affecting those born between 6 March 1961 and 5 April 1977. By 2028, everyone in this group will need to wait until 67 to receive their pension. And that’s not all—there’s talk of potentially increasing it to 68 between 2044 and 2046.
Chancellor Rachel Reeves is prioritising a review to ensure pensions remain sustainable and affordable as life expectancy increases. This review, due in March 2029, will scrutinise whether current savings habits are enough for retirement and if the state pension age will be adjusted again.
The need for change is also about tackling financial pressures on the Treasury; without intervention, pension costs could skyrocket in the coming decades, accounting for nearly 8% of GDP. Some experts suggest this might prompt the government to rethink plans for an 68-year age increase sooner rather than later.
Voices from the field, like Rachel Vahey of AJ Bell, highlight that more immediate changes might be unavoidable. Meanwhile, concerns are being raised by organisations such as the Rail, Maritime and Transport Union, which warns of direct action if the retirement age rises further. The challenge remains balancing increased life expectancy with an ageing population, without placing undue burden on workers.
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