Nearly six million workers will have to wait up to a year longer to claim their State Pension under the new proposed timetable.
The increase to the State Pension age from 67 to 68 is to be phased in between 2037 and 2039 – seven years earlier than originally planned.
The rise was scheduled to take place between 2044 and 2046, but the Government has decided to go with the recommendation in John Cridland’s review to alter the timetable and bring it forward.
The Government said the change would save the taxpayer £74 billion by 2045/46.
Why it’s important
Your State Pension age is important as it’s the earliest you can start claiming your State Pension benefit, which you build up through National Insurance Contributions throughout your working life.
For those who don't have a workplace pension or any other pension savings, it's also the point when you are able to stop working.
What it means for you
Around 5.8 million men and women born between 6 April 1970 and 5 April 1978 will be impacted by the plan to bring forward when the State Pension age increases.
The State Pension Age for this group is currently 67 but will increase to between 67 years and one month and 68 years depending on date of birth.
So, if you’re aged between 39 and 47 you will have to wait up to a year longer before you can unlock your hard-earned State Pension cash.
However, the new proposal won’t impact anyone born on or before 5 April 1970 or anyone born on or after 6 April 1978.
You can check your current State Pension age online.
Take control of pension savings with a SIPP
Why is the State Pension age changing?
As we’re living longer we’re spending more of our adult lives in retirement, which the Government has to pay for.
When the State Pension was introduced in 1948, a 65-year-old would typically claim it for 13.5 years, which was about 23% of their adult life.
Now in 2017, a 65-year-old will typically claim the State Pension for 22.8 years, or 33.6% of their adult life.
The Government wants to make changes so that the State Pension is more sustainable and fair to all generations, and aims to bring down the life spent in retirement to 32%.
What about younger people?
The State Pension age will now be regularly put under review, to make sure it's sustainable and fair, which means there could be further rises impacting other age groups.
A report by the Government’s Actuary Department in March suggested that those under the age of 30 may have to wait until 70 before they qualify for the State Pension.
How to retire early
The Government will try to legislate the change in 2023 to ensure the latest life expectancy figures are used.
If you don't fancy working until you're 68, you should think about increasing contributions to your personal or workplace pension.
You can access a workplace or personal pension at 55, well before you can unlock your State Pension.
For more tips read our guide: How to retire early.
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How to top up your state pension
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