Millions of people in their early 50s could miss out on up to £18,000 if the state pension age rises to 68 sooner than expected, research has shown. The rising cost of the state pension has prompted speculation the state pension age (SPA) may have to rise.
Currently, the full rate of the new state pension is £230.25 per week, though the amount depends on a person’s National Insurance record. It starts at 66, but the qualifying age is due to rise to 67 by 2028.
A further increase isn’t due until the mid-2040s. It will affect people born from April 6, 1977, onwards.
Wealth manager, Rathbones, said while the Government is expected to give 10 years’ notice of a change in the timing, it could take action straight after an official review into the SPA in 2029.
It said this could mean the hike to 68 takes place from 2039-41, affecting workers aged 51, 52 and 53 now.
Rathbones’ research shows someone aged 51 now would lose out on £17,774 if they have to wait until they are 68 to claim the full state pension.
A 52-year-old could lose out on a year of state pension worth £17,340 and someone aged 53 now could lose £16,918, according to the research cited in This is Money.
The wealth manager’s findings are based on the state pension rising at least 2.5% per year. This is one increase included in the triple lock pledge, which sees the state pension increase according to whichever is the highest – inflation, average earnings growth or 2.5%.
Ministers have pledged to retain the triple lock and advised experts looking into the SPA to assume it will remain in place. By law, the Government has to review the SPA every six years.
Chancellor Rachel Reeves has said that a review into raising the state pension age is needed to ensure the system is « sustainable and affordable ».
The Government review is due to report in March 2029 and Ms Reeves said it was « right » to look at the age at which people can receive the state pension as life expectancy increases.
She said: « As life expectancy increases it is right to look at the state pension age to ensure the state pension is sustainable and affordable for generations to come. That’s why we have asked a very experienced set of experts to look at all the evidence. »
