State pension age increase likely to be ‘accelerated’ as Government costs surge | Personal Finance | Finance

Ministers are likely to bring forward plans to increase the state pension age, a wealth expert has said.

The state pension age is currently 66 for both men and women, with legislation in place for this to increase gradually to 67 between 2026 and 2028 and then to 68 between 2044 and 2046.

An independent review into the state pension age was published this year with many analysts expecting the timetable for the move from 67 to 68 to be brought forward.

But when the review was published, ministers said a decision on changing the state pension age policy will be put off until after the General Election.

Catherine Foot, director of Phoenix Insights, warned the timetable for increase the state pension age may well have to be brought forward.

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She said: “The state pension has become a political hot potato with decisions delayed until after the next election.

“However, it’s likely we will see an acceleration of the state pension age increase to mitigate costs, so it’s critical those unable to stay in work, such as people with ill health, are supported to ensure pre-retirement poverty doesn’t spiral out of control.”

Another uncertain issue for the future of the state pension is how much the payments will go up.

At present, the triple lock policy guarantees the state pension goes up each year in line with the highest of 2.5 percent, inflation or average earnings.

With high levels of inflation last year, state pensioners had a large increase when payments went up in April, of 10.1 percent.

But analysts are concerned if high levels of inflation continue as more people start to claim their state pension, the policy may not be sustainable.

Ms Foot said: “Short-term commitments to the triple lock will be easier if inflation cools, but serious questions remain around the long-term funding challenge of the state pension.

“Costs are set to balloon in the coming decades as our younger wave of baby boomers (those born in the early 1960s) reach state pension age and live longer in retirement.”

She warned Britons planning for their retirement to make sure they are not overly relying on their state pension.

She said: “Even with a future commitment to the triple lock, relying solely on the state pension will leave people short of a decent standard of living in retirement.

“Given there is a significant knowledge gap among the public, we need better communication to engage people with how much the state pension will provide and what age they can access this.

“This will help to identify any gaps in savings and support decision making as people reach the end of their careers.”

The full basic state pension currently pays £156.20 a week while the full new state pension is £203.85 a week.

A person typically needs 30 years of National Insurance contributions to get the basic state pension and 35 years of contributions to get the new state pension.

An individual can check how much state pension they are on track to receive when they start to claim the support using the state pension forecast calculator on the Government website.

A person who has gaps in their National Insurance record may be able to increase their state pension payments by voluntarily paying contributions.

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