New State Pension age review could see people working longer before retirement
Pension Credit – Could you or someone you know be eligible?
The State Pension age is set to start rising from 66 to 67 next year, with the increase due to be completed for all men and women across the UK by 2028. The planned change to the official age of retirement has been in legislation since 2014 with a further rise from 67 to 68 set to be implemented between 2044 and 2046.
The UK Governmen t has announced a new Pension Commission to investigate how to boost pension saving with its findings due to be published in 2027. Areas for consideration will include auto-enrolment saving rates, boosting saving among groups such as the self-employed and a review of the State Pension age.
Dr Suzy Morrissey will report on factors the UK Government should consider relating to State Pension age and the Government Actuary's Department will prepare a report on the proportion of adult life in retirement.
Commenting on the UK Government's plans to review the State Pension, including the age at which it is received, Social Justice Secretary Shirley-Anne Somerville, said: 'The Scottish Government has consistently warned the UK Government against raising the State Pension age more quickly than is needed.
'So, I welcome the fact the UK Government has committed to gathering more evidence before making any final decisions on a timeline. We look forward to the UK Government sharing their proposals with us and we will respond in due course.
'I am particularly keen to see that the difference in average life expectancies found across regions in the UK is fully considered. Otherwise, generations may be left behind, just as they have been before.
'While State Pension policy is reserved to the UK Government, we are committed to enabling older people to have a dignified retirement. That's why, for example, we are providing a Pension Age Winter Heating Payment to 720,000 more people this year, helping to ease the burden of rising energy costs.'
Helen Morrissey, head of retirement analysis at Hargreaves Lansdown, said: 'The Commission will look at state pension and whether the age at which we receive it should increase. Again, it's not an easy decision - we've seen increases in life expectancy slow down in recent years. There's also the issue of healthy life expectancy to consider.
'This currently hovers in the early 60s, so the reality is that many people cannot keep working into their late 60s. Any decision to increase state pension age further needs to take into account what needs to happen to help people remain in the workforce for longer, so they don't fall down the income gap between leaving work and taking their state pension.'
She added: 'It's also an opportunity for the government to assess the long-term position of the Triple Lock. Speculation continues to swirl as to whether the Triple Lock's days are numbered but the cost of maintaining it will need to be balanced against the role it plays in helping workers, particularly those who are lower paid to meet their target retirement income.'
State Pension age rise 2026-2028
The State Pension age rise from 66 to 67 will affect those born between April 6, 1960 and March 5, 1961. Anyone born between these dates is being prompted to check their State Pension age on GIV.UK here to find out the earliest point at which they'll be eligible for their State Pension.
Check your State Pension age online
Your State Pension age is the earliest age you can start receiving your State Pension. It may be different to the age you can get a workplace or personal pension.
Anyone of any age can use the online tool at GOV.UK to check their State Pension age, which can be an essential part of planning your retirement.
You can use the State Pension age tool to check:
When you will reach State Pension age
Your Pension Credit qualifying age
When you will be eligible for free bus travel - this is at age 60 in Scotland
Check your State Pension age online here.
How to get full New State Pension
Alice Haine, personal finance analyst at Bestinvest by Evelyn Partners, the online investment platform, 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 UK 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 added: '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."
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