The State Pension age is set to rise from 66 to 67 starting next year, with the increase expected to be fully implemented for all men and women across the UK by 2028
The State Pension age in the UK is due to increase from 66 to 67 starting next year, with the rise expected to be fully implemented for all men and women across the country by 2028.
This planned adjustment to the official retirement age has been legislated since 2014, with another increase from 67 to 68 scheduled to occur between 2044 and 2046.
The Pensions Act of 2014 brought forward the increase in the State Pension age from 66 to 67 by eight years.
The UK Government also changed the method of phasing in the increase in State Pension age, meaning that instead of reaching State Pension age on a specific date, people born between March 6, 1961 and April 5, 1977 will be eligible to claim the State Pension once they turn 67.
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It’s vital to be aware of these upcoming changes now, especially if you’ve already set up a retirement plan. All those affected by changes to their State Pension age will receive a letter from the Department for Work and Pensions (DWP) well in advance.
Under the provisions of the Pensions Act 2007, the State Pension age for both men and women will rise from 67 to 68 between 2044 and 2046.
The Pensions Act 2014 requires a regular review of the State Pension age, at least once every five years. These reviews will be based around the idea that individuals should be able to spend a certain portion of their adult life receiving a State Pension, reports the Daily Record, reports the Mirror.
A review of the proposed increase to 68 is due before the end of this decade, originally planned by the previous Conservative government to take place two years after the general election – which would have been 2026.
The State Pension age review will take into account life expectancy and other relevant factors when determining the State Pension age.
Following the report from the review, the UK Government may choose to implement changes to the State Pension age. However, any proposals must be approved by Parliament before they can become law.
How to find out your State Pension age online
Your State Pension age is the earliest age at which you can start receiving your State Pension. It may differ from the age at which you can receive a workplace or personal pension.
People of all ages can use the online tool on GOV.UK to find out their State Pension age, a crucial step in planning for retirement.
Boosting State Pension payments
HM Revenue and Customs (HMRC) recently announced that over 10,000 payments totalling £12.5 million have been made by people using the new digital service to boost State Pensions since its launch last year.
However, those keen to boost their retirement income through the contributory benefit have only a few weeks left to fill any gaps in their National Insurance (NI) records dating back to 2006.
Typically, individuals can only make voluntary contributions for the previous six tax years, and once the April 5 deadline passes this year, the standard six-year time limit will be reinstated.
Back in 2023, the former government extended the deadline for paying 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 timeframe has provided people with additional opportunity to consider their options and make their contributions.
Chaps born after April 6, 1951 and women born after April 6, 1953 can make voluntary NI contributions to enhance their New State Pension.
Some may find National Insurance credits more suitable than contributions, so it’s crucial to check options. People can learn more about making voluntary contributions on GOV.UK here.
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, clarified: “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 a costly process, so it’s crucial to evaluate 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 ill, 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 3.7 million since its launch.”
She further explained: “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 brief 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.”