Raising the State Pension Age to 67 from 2026

The Chancellor today announced that the State Pension Age would rise to 67 over a two year period from 2026 – 2028. This change was due to take place from 2034 therefore the announcement brings forward the timetable by 8 years.

Assuming the Government is planning to phase in the increase between 6 April 2026 and 6 April 2028 everyone born after 5 April 1960 will not receive their state pension until after their 66th birthday. Those born after 5 April 1961 will have to wait a full extra year and will not receive their pension until age 67. The changes will affect people currently aged 51 or younger.

The Chancellor’s announcement that the Government will raise State Pension Age more quickly than expected will come as a bitter blow to many people who are fast approaching retirement especially those in ill-health, caring for relatives and those out of work.

The Chancellor said that this change was as a result of the continuing increase in longevity. However, there are significant inequalities. The most recent figures on life expectancy by local area show that between 2004-06 and 2008-10 the gap between the local areas with the highest and lowest life expectancies increased. For example, the latest regional figures show:

• For men in Glasgow City life expectancy at age 65 was 14.4 years – 10 years lower than those in Kensington and Chelsea who can expect to live a further 24.4 years.
• For women at age 65 life expectancy in Glasgow Central is 17.8 years compared to 24.4 years in Kensington and Chelsea.

Age UK recognises that as life expectancy increases it is reasonable to consider increases to State Pension age and longer working lives, however this decision has been based on no published detailed analysis. Average life expectancy must not be the only factor that is considered as at the moment the huge disparities in healthy life expectancy across the country means that the poorest socio-economic groups will be required to sacrifice proportionately more of their retirement.

The Chancellor has made this announcement without taking into account the damaging effect it will have on confidence in pensions saving amongst people of all ages. Age UK is calling for an Independent Pensions Advisory Commission to be set up to ensure pensions decisions are based on all the relevant factors including inequalities in life expectancy, employment opportunities, trends in private provision and prospects for older workers.

This week the Government has announced an increase in State Pension age and a delay in auto-enrolment for some people rather than looking at retirement provision in the whole. Any changes in State Pension age should be made in the context of a strategy to improve health inequalities, a timetable for the reduction and abolition of pensioner poverty and a strategy for achieving this, a firm commitment to private pension reform and improvement to state pensions.

Please view the full Age UK response here .