The State Pension age in the UK is set to rise from 66 to 67 starting next year, with the increase expected to be fully implemented for all men and women by 2028. This change to the official retirement age has been legislated since 2014, with a further increase from 67 to 68 planned between 2044 and 2046.
The Pensions Act 2014 accelerated the increase in the State Pension age from 66 to 67 by eight years. The UK Government also altered the phasing of the State Pension age increase, meaning that instead of reaching the State Pension age on a specific date, individuals born between March 6, 1961, and April 5, 1977, will be eligible to claim the State Pension once they turn 67.
Being aware of these impending changes is crucial, particularly if you have 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. According to 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 mandates a regular review of the State Pension age at least every five years. This review will be based on the principle that individuals should be able to spend a certain portion of their adult life receiving a State Pension, reports the Daily Record.
A review of the proposed increase to 68 is due before this decade ends. The previous Conservative government originally scheduled it to occur two years after the general election, which would have been 2026. The State Pension age review will consider life expectancy and other relevant factors in setting the State Pension age. Following the review’s report, the UK Government may decide to implement changes to the State Pension age. However, any proposals must pass through Parliament before becoming law.
Check your State Pension age online:
Your State Pension age is the earliest age you can begin receiving your State Pension. It might 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 check their State Pension age, an essential step in retirement planning.
You can use the State Pension age tool to check:
Check your State Pension age online here.
Boosting State Pension payments:
HM Revenue and Customs (HMRC) recently revealed that over 10,000 payments totalling £12.5 million have been made by individuals using the new digital service to enhance State Pensions since its launch last year.
However, those eager to maximise their retirement income through the contributory benefit only have a few weeks left to fill any gaps in their National Insurance (NI) records dating back to 2006.
Brits have a window of opportunity to top up their pension pots by paying voluntary National Insurance contributions, with the government extending the usual six-tax year limit until April 5, 2025. This extraordinary move allows individuals affected by State Pension transition rules additional time to boost their pension entitlement for tax years between April 6, 2006, and April 5, 2018.
Men born after April 6, 1951, and women after April 6, 1953, can now speed up their New State Pension. Still, with the slight possibility of NI credits being applicable instead, it’s crucial to double-check before contributing.
The GOV.UK site details in-depth guidelines on bolstering the state pension through voluntary contributions, and current workers can also get a forecast on their State Pension there.
Alice Haine, a personal finance expert at Bestinvest by Evelyn Partners, said: “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 an expensive process, so it is important to assess 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 sick, 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 3.7m since its launch.”
She continued: “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 short 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 explained: “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.”
