Changes to State Pension Age Rules Could Spur More Delay in Retirement

Changes to the state pension age are prompting many to delay retirement, with an increasing number of individuals working longer to ensure financial security. For 2024, the average retirement age has reached its highest point since records began, with men retiring at around 65.7 years and women at 64.5 years, according to recent data.

Pension Age Increase Set to Continue

The state pension age, which has risen to 66, will increase further to 67 between 2026 and 2028. Alistair McQueen, head of saving and retirement at Aviva, explained that this rise is a significant factor in pushing retirement ages higher.

He said, “The rising state pension age has encouraged older ages of retirement. Our exit age from the workforce has continued to climb since records started in 1984.”

Laws and Pension Flexibility Encourage Later Retirement

Recent changes to employment laws and pension access have also contributed to this shift. Since 2011, it has been illegal to dismiss employees solely based on age, and from 2015, individuals gained more freedom in how they access their pension savings.

McQueen emphasized the financial benefits of working longer, stating that each extra year of employment can add significantly to one's pension pot. For the 2024/2025 tax year, the full new State Pension stands at £221.20 per week, but the exact amount depends on National Insurance contributions. Individuals need 35 qualifying years for the full pension, with a minimum of 10 years required to receive any state pension benefits.

Key Pension Facts:

• Current State Pension age: 66 (rising to 67 by 2028)
• Average retirement age: 65.7 years for men, 64.5 for women
• Full new State Pension (2024/2025): £221.20 per week
• Eligibility: Minimum 10 years of National Insurance contributions; 35 years for the full pension

For more information on State Pension eligibility and payments, visit the government’s official website.