DWP warning on state pension age over Rachel Reeves change | Personal Finance | Finance
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DWP warning on state pension age over Rachel Reeves change | Personal Finance | Finance

Posted on by Amelia Pressman

A major announcement for the state pension could come in the Spring Budget, an expert has said.

The issue of the statutory retirement age is a growing concern, with the age set to soon be raised from the current 66 to 67 between 2026 and 2028.

A report was published during the previous government in 2023 that looked at the issue and examined whether the eventual transition from 67 to 68, currently scheduled for 2044 to 2046, should be brought forward.

Ministers said at the time that there would be a “further review” of the matter in the current parliament.

Fiona Peake, personal finance expert at brokerage Ocean Finance, said: “As part two of the pensions review approaches, we are likely to see a new debate about the state pension age and whether changes are needed to keep the system sustainable.”

“The Government has previously stated that there will be a review of the proposed increase in the state pension age to 68 within two years of this Parliament, so we may be looking at an announcement around the Spring Budget.”

Chancellor Rachel Reeves will deliver her spring budget on Wednesday 26 March 2025. A DWP spokesman said: “There is a legal obligation to review the state pension age set out in the Pensions Act 2014 and in line with the legislation the next review must be completed by the end of March 2029.”

Looking at the factors that could impact the state pension age, Ms Peake said: “Whether or not the increase in the state pension age from 67 to 68 is brought forward will depend on a balance between affordability and equity.”

“Life expectancy trends, labor force participation and public finances will all play a role. As we live longer and work later, it may seem logical to push the state pension age forward, but such changes can feel deeply unfair for those with physically ill, demanding jobs or with health problems that may last until the end 60 have difficulty working.”

The pension expert also warned of the danger that many people are not aware of the increase in their statutory retirement age from 66 to 67 years.

She warned that those with low incomes or insecure jobs are less likely to hear about the change or not regularly check pension policy updates.

Ms Peake urged: “Employers, the Government and organizations such as the Pensions Advisory Service all need to ensure these changes are well communicated.”

“Otherwise, people could be in for a rude shock when they realize they will have to wait longer than expected to receive their state pension.”

With just a week and a half until the Spring Budget, state pension payments will rise by 4.1 per cent in line with the triple lock.

This will increase the full new state pension from £221.20 per week to £230.30 per week, while the full basic state pension will increase from £169.50 per week to £176.45 per week.

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