Millions to work longer as state pension age to be hiked under new government plans – what it means for you

THE retirement age is set to rise to 68 by the end of the 2030s under new Government plans.

Millions born in the 1970s and later are likely to be told they must work for longer as early as the March Budget.

But Chancellor Jeremy Hunt and PM Rishi Sunak were last night warned they were “playing with fire” if the huge change came before the next general election.

The move would bring billions for the UK’s struggling finances.

The state pension age is already due to rise from 66 to 67 by 2028.

The next increase — to 68 — was not due to happen until 2046, but an upcoming review is set to say it should be brought forward.

Ministers are planning to move that date forward as the population gets older and birth rates plummet, meaning there are few young people to pay the tax bill.

A previous review said it should come forward as early as 2037.

But the Treasury is said to want the change to 68 to come in as early as 2035 — affecting those who are 54 and under today.

The Sun has learnt the Chancellor is eyeing up announcing the move as early as the March Budget.

But he faces opposition from Work and Pensions boss Mel Stride, who is pushing for 2042 – arguing that predicted increases in life expectancy have failed to materialise.

A government source said: “There is a real risk that more people will die before they reach retirement and can draw their pensions, given the change in life expectancy projections since 2017 if we were to bring the state pension age increase too far forward.

“That would be especially true of people in the most deprived areas of the country where life expectancy is already lower.”

The head of retirement policy at AJ Bell, Tom Selby, warned: “Rishi Sunak will be playing with political fire. The latest official data suggests average life expectancy improvements — the main justification for state pension age increases — have gone into reverse since the pandemic.”

The Department for Work and Pensions said no decision has been made and the Government was required by law to review the state pension age regularly.

A DWP spokesperson said: “No decision has been taken on changes to the State Pension age.

“The Government is required by law to regularly review the State Pension age and the second State Pension Age Review is currently considering, based on a wide range of evidence including latest life expectancy data and two independent reports, whether the rules around State Pension age remain appropriate.

“The review will be published early this year.”

Treasury sources decline to comment ahead of the Budget.

How are you affected?

Everyone working under the age of 54 could be affected by these plans – but it’s those in their early fifties who would be worst affected.

Anyone born after April 1971 was heading towards a state pension age of 68 already.

The maximum new-style pension you can get is £185.15 a week, or around £9,627 a year.

This is going up by 10.1% from April following the government’s Autumn Statement.

That means the weekly allowance will rise to £203.85.

It’s important to note that you can retire at any time, but you need to have a personal pension or retirement plan in place. 

While the state pension might not be enough to live off alone, getting the most from it can give your finances a big boost.

Here are five things you can do to boost your state pension in 2023.

You can work out when you can claim the state pension under current rules using the government calculator.