The impact of raising the State pension age

The raised State pension age may affect your retirement planning. Is it time to review your pension plans?

New research shows how the most recent increase in state pension age has hit those affected.

The last change in State pension age (SPA) was phased in between December 2018 and October 2020. Over that period, the SPA for both men and women increased from 65 to 66. The move was controversial, not least because it followed immediately after the previous increase of women’s SPA from 60 to 65, which started in 2010.

The financial impact of the SPA increase to 66 has recently been examined by the Institute for Fiscal Studies (IFS), which found:

The IFS paper is not just of academic interest, as another change to SPA is imminent. Between April 2026 and April 2028, SPA will gradually rise by another year to age 67. If you were born after 5 April 1960, you will be affected. This time around, the amount of pension loss and Treasury gain will be greater, thanks to the surge in inflation.

In June, the Chief Secretary to the Treasury confirmed, in answer to a written question, that for April 2023 “the Triple Lock will apply for the State pension.” Nevertheless, your retirement plans may need a review if you have not allowed for rising SPA (and there is yet another year’s increase to come, to 68, currently scheduled for 2037/39).

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.
Past performance is not a reliable indicator of future performance.

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