How quickly will UK pension ages rise?

One of the most sensitive issues in the world of pensions is due to be tackled - the speed of rises in UK pension ages.

The government confirmed over the summer that a review of the State Pension age (SPA) - the age at which you are eligible to claim the payment - will be held and concluded by 2029.

It will also affect the normal minimum pension age (NMPA) - the age you can access your company pension or personal pension. This has mostly been set 10 years below the State Pension age, a practice the government may continue.

As it stands, the State Pension age is 66 for both men and women. It will rise to 67 by 2028 and to 68 by 2044-46, affecting those born after April 1977. The NMPA is 55 and will rise straight to 57 on 6 April 2028. 

The review will consider the expected cost of the State Pension, and changes in life expectancy. The long-term trend of people living longer has helped increases in the State Pension age. However, that trend has faltered with life expectancy dipping slightly in recent years.

What is the detail on the rising UK State Pension age?

The government has legislated for an increase from 66 to 67 in 2026-28 and to 68 in 2044-46. However, the timing of the rise to 68 will be looked at by the independent review.

These reviews are held each parliament and come back with recommendations which the government accepts, rejects, or comments on. The recent reviews have made different recommendations:

• The 2017 review suggested a rise to 68 in 2037-39, far  morequickly than the 2044-46 existing plan. This would affect those born between 6 April 1970 and 5 April 1978. 
• The 2022 review recommended a rise to 68 in 2041-43, a more moderate acceleration amid a stalling of life expectancy increases. It also mooted a possible rise to 69 in 2046-48.

The previous Conservative governments acknowledged the recommendations but delayed the decision. The recommendations from the reviews are not binding. The current government could respond in 2029 or delay the issue until after the general election, which is due to be held by August 2029.  

Those most affected under the current legislation and guidance:

• The rise to 67 affects those born on or after 5 April 1960.
• The rise to 68 (between 2044 and 2046) affects those born on or after 5 April 1977.

The trends underline the need for individuals to accelerate their own retirement savings plan. Our comprehensive Saving for Retirement pages are an excellent resource to help you get started or accelerate your pension progress. It should also be noted that a new Pensions Commission was announced alongside the retirement ages review. It will look at the savings system, aiming to tackle under-saving, gaps in coverage, particularly among the self-employed and minority groups, and explore ideas like “sidecar savings” that could be accessed in emergencies. In short, the government will want to make pension saving more appealing. 

Could pension ages rise even faster?

Various think-tanks have warned about the unaffordability of the State Pension. Last year, the International Longevity Centre (ILC) warned that the State Pension age would have to rise to 70 or 71  by 2050 to remain affordable.

Dr Suzy Morrissey, a pension policy specialist who will lead the review, will examine Automatic Adjustment Mechanisms (AAMs) as part of her review. AAMs have been used to link the SPA to life expectancy in different ways in countries such as Estonia, Finland, Greece, Italy, the Netherlands, Denmark, Portugal and Slovakia.
Denmark has tied its official retirement age to life expectancy since 2006 and said earlier this year that the age would rise to 70 by 2040.

Fast rises in UK life expectancy in the 2000s slowed in the 2010s and then stalled - and even fell - during the Covid pandemic. Healthy life expectancies have also been significantly worsening, according to analysis by the Health Foundation, which may also be considered.  

What is the process for deciding State Pension ages?

A previous idea to automatically link the pension ages to life expectancy was dropped a decade ago. Instead, it was decided that independent reviews would be held each parliament and make recommendations, with the government offering a response the following year.

The whole process is underpinned by some broadly agreed aims:

• That a third of adult life should be spent in retirement.
• That State Pension costs should not exceed 6% of GDP.
• People should have 10 years' notice of any changes.

Reviews were subsequently held in 2017 and 2022. 

Is the State Pension affordable?

When the pension was introduced in 1909, it applied to people from age 70. But average life expectancy from birth was just 52. Between 1951 and 2020, life expectancy increased by 10 years. It is projected to rise by another four years by 2070. 

While longer lifespans are something to celebrate, they come with additional state costs.

The ‘triple lock’ is a further complication. It guarantees a minimum rise of 2.5% each year or the higher of inflation or wages. As a result, State Pension payments have grown relatively quickly over the past decade. The bulge in Baby Boomers - those born between 1945 and 1965 - reaching retirement further increases the cost pressure.

The Office for Budget Responsibility expects the cost of the State Pension as a percentage of GDP to rise from 4.8% to 8.1% by 2071. The stated aim has been to keep it below 6%, a level it would breach somewhere in the late 2040s (see table).

The primary ways to mitigate this are either slower rises in the State Pension, which would involve watering down or abandoning the triple lock, or to increase the age of State Pension eligibility.

^{Source: Office for Budget Responsibility, 2023}

What about the ‘private pension age’?

The normal minimum pension age (NMPA) is the earliest age most people can start withdrawing money from their personal and workplace pensions. It's currently 55 years but this will increase to 57 from 6 April 2028, unless you have a Protected Pension Age or you're retiring due to ill health. Previously, the government has said the NMPA would be 10 years below the state pension age. In theory, it would rise to 58 when the state pension age rises to 68. 

How to respond to rising pension ages

If retirement is a way off, you still have time to take control of your own pension age. Time is a powerful weapon and the single biggest factor that determines the growth of your money - the longer, the better, although of course there are no guarantees.

A company pension is a good place to start. Many employers will match or part-match contributions. Pensions are the best vehicle because of the tax breaks. Most people won’t have to pay tax on contributions made from pay.

Private pensions and SIPPs (self-invested pensions) have the same advantage of escaping income tax on contributions, with the same generous annual limit of £60,000 for most people.

It is important to take control of your pensions, to get a holistic view - and to have a plan. A financial adviser can help develop that with you.

• Open a SIPP
• See how your money might grow with our ISA calculator

State pensions today - and tomorrow

The single tier State Pension, introduced for those retiring after 6 April 2016, has a maximum payment of £230.25 per week in 2025/26. To qualify for the full amount, 35 years of National Insurance Contributions are required. Ten qualifying years are required to be entitled to any amount.

The government allows you to check your State Pension forecast and your State Pension age.

It is also worth reading our report on the future of the State Pension:

• Read: Triple Lock: what will the State Pension be in the future?

Important information - investors should note that the views expressed may no longer be current and may have already been acted upon. Eligibility to invest in a SIPP and tax treatment depends on personal circumstances and all tax rules may change in the future. Withdrawals from a SIPP will not normally be possible until you reach age 55 (57 from 2028). This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice.