State pension age rise brought forward seven years

19 July 2017

The state pension age will rise to 68 between 2037 and 2039 – seven years earlier than planned, under government proposals announced today.

State pension age had been due to rise to 68 between 2044 and 2046, meaning this change will hit everyone born between 6 April 1970 and 5 April 1978.

However, the proposals must be approved by Parliament before they are agreed – and this won’t happen until the next government state pension age review in 2023.

The government says the changes are necessary given rising life expectancy. The latest projections from the Office for National Statistics (ONS) show that the number of people over state pension age in the UK is expected to grow by a third between 2017 and 2042, from 12.4 million to 16.9 million.

The government adds that the proposals are in line with the timetable set out by the ‘Cridland Review’ in March this year.

Secretary of State for Work and Pensions, David Gauke, comments: “Since 1948 the State Pension has been an important part of society, providing financial security to all in later life. As life expectancy continues to rise and the number of people in receipt of State Pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations.”

But the decision flies in the face of a report published earlier this week by the Institute of Health Equity at University College London, which found that life expectancy has stalled since 2010 due to a rise in dementia deaths and squeezed health services.

‘Review your workplace or private pension now’

Following the government’s announcement, the key message from pension experts is not to rely on the state pension in retirement.

Steven Cameron, pensions director at Aegon says: “A blanket increase in state pension age will be particularly concerning for those who through health concerns, job pressures or lack of employment opportunity simply can’t keep working into their late 60s. Requiring everyone to wait till an ever increasing age to draw a state pension is inflexible and increasingly out of sync with private pensions which can be taken from as early as age 55 and offer people a flexible and personalised transition into retirement.

“The clear message is that anyone who wants more choice over how and when they retire can’t rely solely on a state pension and should be reviewing their workplace or private pension provision.”

Old Mutual Wealth head of retirement policy, Jon Greer, adds: “The government deserves some credit for biting the bullet and taking the unpopular decision to increase the State Pension age. However, it appears it was not convinced that more creative solutions were administratively viable. The ‘universal’ State Pension age we currently operate under means that retirement age applies equally to everyone. While it is possible to delay retirement and take a higher pension in exchange, the same flexibility does not exist in reverse.

“The key message here is that the government is taking a gradually declining role in supporting retirement income. A combination of increases in life expectancy, and the growing number of retirees relative to the working age population, means that individuals will have to save harder for their own retirement.”

Moneywise verdict

This move has been expected for a long time and state pension age could continue to increase in future so don’t rely on getting state pension.

The age at which you can take private pensions is linked to state pension age. At present you can take a private pension ten years before your state pension. This proposal would mean that those born from 1970 to 1978 may now not be able to access their private pensions until age 58. If you’re affected by this and wanted to retire earlier, you will have to make other provisions, perhaps by contributing to a Stocks and Shares Isa. 


In reply to by anonymous_stub (not verified)

we can all retire early, but you have to make this happen yourself rather than relying on state hand outs, private pensions ? no these are one big rip off, for me it was buy to let which i got into in my 30s while still in the day job, i donot receive my state pension for another yr yet, but i retired from the day job 10yrs ago aged 54, what it all boils down to is what you want from life and how hard you are prepared to work for it.

In reply to by Andrew townshend (not verified)

Hi Andrew, The term 'hand out' implies charity, whereas one has to pay in to get a state pension. As far as buy to let. That's a privilege for the few- both in terms of logic ( who'd be left to pay the rent ? And many prefer to buy than rent). It's also a privilege for those with access to finance. Rent is almost by definition a divide between those with the spare cash to make money from that capital, and those without the means even to buy a home to live in, and thus who resort to renting. The renting then tends to eat more money than a mortgage- and thus they are trapped. Thus the rentier has their market. It's dependent upon wealth imbalance. So well done, to some extent, if you had to struggle to pay for a second house ) or more), and have thus set yourself up nicely. Others do not struggle but have easy access to finance ( through middle class parents perhaps, one way or another). But for those who start life with no advantages- and aren't lucky, and don't wish to make life into a struggle. No- they cannot retire early, no live of the returns of capital investment . I know because I save and actively invest- but will likely never realise enough capital to live on- even with 12%+ pa returns. And this year- no work- so now my savings are actually dwindling- and I live on only £6k pa . Maybe those like myself- or those who struggle to make ends meet ( I don't so far)- and work full time +, could retire early... but only into a comfy cardboard box- with a paper cup on a busy street corner.

In reply to by anonymous_stub (not verified)

Hi Andrew Townshend,

Thanks for your comment - we think you make a valid point, so we've included your thoughts on the Letters page of our September issue (out today).

Best wishes,

Moneywise Helen

In reply to by anonymous_stub (not verified)

If this is the case, then it's a real lottery for those born in 1970-72. In all likelihood, future governments will raise the state pension age yet again after 2023. I am sure that it will be set at 70 to come into effect by 2040, for instance, further hammering those within that particular age band.

In reply to by anonymous_stub (not verified)

Does anyone know whether the min age for accessing your private pension increases from 55 yrs old? I thought it was in 2028 (assume April6th of that year), and was going to be then 57 yrs old. But with these latest changes is that now 58 for anyone in born from 6 April 1970, or is this change still from 2028 and therefore affect those born after 6 April 1973?Thanks

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