State pension age to continue to rise as policy review looms – how will you be affected? | Personal Finance | Finance
The age when Britons can claim their state pension is currently 66 for both men and women. Plans are in place for this to gradually increase to 67 between 2026 and 2028, and then to 68 between 2037 and 2039.
Chancellor Jeremy Hunt announced there would be a review into the state pension age in early 2023, with some speculating the policy could be brought forward.
Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, told This Is Money: “Rumours suggest the Government wants to speed up the shift even more with a move to 68 potentially happening as early as 2032.”
Others have warned the state pension age could eventually rise beyond 68 as the Government struggles to cover the cost of pension payments in future years.
Tom Selby, head of retirement policy at AJ Bell, said previously: “Maintaining the current proportion of the population living up to and beyond state pension age would require an increase in the state pension age to 68 by 2034, 69 by 2038 and 70 by 2042, according to the International Longevity Centre, a highly respected think-tank.
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“Younger savers need to prepare for a world where the state provides less of their retirement income than it has done historically.
“Indeed, it would not be surprising if those in their 20s and 30s today have to wait until their 70th birthday or even beyond to receive the state pension.”
When can I claim the state pension?
A person can check their state pension age using a tool on the Government website. The tool will also tell them when they will qualify for Pension Credit and if they’re eligible for free bus travel.
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There is also a state pension forecast tool that a person can use to find out how much their payments will be and how to increase their payments if possible.
There are two types of state pension available to Britons, depending on when a person was born.
The basic state pension is available to men born before April 6, 1951 and women born before April 6, 1953, while those born before or after these dates are on the new state pension.
A person typically needs 10 years of National Insurance contributions to claim any state pension.
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An individual will typically need 30 qualifying years of contributions to get the full basic state pension and 35 years of contributions to get the full new state pension.
The full basic state pension is currently £141.85 a week while the full new state pension is £185.15 a week.
The state pension is set to increase in April, when payments will go up by 10.1 percent, as the triple lock policy has been reinstated.
The policy guarantees the state pension increases each year in line with the highest of 2.5 percent, the rise in average earnings or the rate of inflation.
People who receive the full basic state pension will see their payments increase to £156.20 a week while those on the full new state pension will get £203.85 a week.
Those approaching state pension age who want to increase their state pension may want to put off retiring so they can add to their National Insurance record, but this will mean they will miss out on the payments for the short term.
There is also the option to buy voluntary National Insurance contributions to boost a person’s record.
A person can pay £15.85 for each missing week of contributions or £824 for a full year.
