The UK government is preparing to raise the state pension age from 66 to 67 between April 2026 and March 2028, a move affecting millions of future retirees. The change, part of ongoing reviews of the pension system, comes as the Department for Work and Pensions (DWP) seeks to manage public spending amid rising costs.
Government Confirms Pension Age Increase
The state pension age has been a subject of ongoing adjustment, with previous increases reflecting shifts in life expectancy and economic sustainability. The last rise, which brought the eligibility age to 66 by 2020, was part of a wider strategy to balance the pension system as the UK population ages.
According to government policy, the pension age is reviewed regularly, and any proposed changes require parliamentary approval.
Under the latest plan, the age threshold for receiving a state pension will rise to 67 over a two-year period from April 2026 to March 2028. While the government cites affordability concerns as a key driver, the decision is expected to impact those who rely on state support, particularly individuals in low-income groups.
According to Jonathan Cribb from the Institute for Fiscal Studies (IFS), the increase will disproportionately affect poorer individuals in their mid-60s, many of whom are already out of the workforce due to health issues and lack substantial private pensions.
He warned that similar past adjustments had led to increased poverty rates among older adults, prompting calls for additional government support.
Financial Impact and Pension Benefit Changes
Alongside the pension age increase, the government has announced a 4.1% rise in state pension payments, aligning with average earnings growth between May and July 2024. The adjustment, confirmed in the Autumn Budget, affects individuals receiving both the new flat-rate state pension, introduced in 2016, and the older basic state pension.
From April 2024, those qualifying for a full new state pension will see their payments increase to £230.25 per week, up from £221.20. Those who reached pension age before April 2016, under the older system, will receive £176.45 per week, compared to £169.50 previously.
Despite the rise in payments, concerns persist over financial security for those nearing retirement. Jonathan Cribb suggested the government could mitigate hardship by providing extra financial assistance to individuals approaching pension age, such as increasing Universal Credit support.
According to the IFS, an additional £600 million annually in targeted benefits could reduce poverty rates for around 30,000 households.
