The Department for Work and Pensions (DWP) plans to raise the state pension age earlier than originally scheduled, potentially affecting millions of people born between April 1970 and March 1978. Treasury officials have informed the Office for Budget Responsibility (OBR) of a policy shift that brings forward the retirement age increase by at least seven years, moving it to 2037.
Currently, the state pension age stands at 66 for both men and women. It is set to rise to 67 by 2028 and is projected to reach 68 between 2044 and 2046 for those born after April 1977. Under the new proposal, individuals aged 49 to 55 would face an extended working period before they can claim their state pension, potentially delaying payments by up to a year or more.
The single-tier State Pension, introduced in April 2016, has a maximum weekly payment of £241.30 for the 2026/27 period, totaling £12,547.60 annually. Experts predict that by 2037, this could increase to approximately £16,500, assuming annual rises comply with the government’s triple lock guarantee.
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To receive the full state pension, recipients must have made 35 years of National Insurance Contributions, with a minimum of ten qualifying years required for any pension entitlement. Delays in reaching pension age could mean a significant financial shortfall for those impacted.
Rachel Vahey, a pensions expert, highlighted the potential challenges: “Bringing the state pension age increase forward means that people born between April 1970 and March 1978 may need to plan carefully to manage the income gap caused by working longer. By 2037, the state pension could be worth around £16,500 a year, making any delay in receiving it financially significant.”
Vahey advises those affected to consider working for longer or increasing private pension contributions to offset the impact. Staying informed about changes to pension age and planning accordingly will be key to safeguarding retirement income.