The state pension age is currently 66 but is scheduled to increase to 67, between 2026 and 2028, a group has warned
A group has issued a warning that millions of people may have to wait several more years to claim their state pension, following Labour’s announcement this week that it will carry out another review of the state pension age.
The current age for accessing the state pension is 66, but plans are in place to gradually increase this to 67 between 2026 and 2028.
One method to curb the rising costs of the policy is to increase the state pension age, while another key strategy would be to alter the triple lock metric. This ensures that state pension rates rise each April in line with the highest of 2.5%, the increase in average earnings or inflation.
The Government has previously pledged to maintain the triple lock for the duration of this Parliament, leading to a 4.1 percent increase in state pension rates this past April due to the policy, reports the Express.
Labour has also confirmed that the triple lock will not be under consideration for the upcoming review. However, retirement experts at wealth group Aegon have warned that there could be changes to the policy in the future.
Aegon pensions director Steven Cameron stated: “The purpose of the review is to look at the age the state pension starts from and the role this plays in managing the long-term sustainability of the state pension.
“As other reports have shown, the triple lock puts the long-term sustainability of the state pension under huge pressure. So the conclusions from the review may be that if the triple lock continues, state pension age will have to go up further and faster than if it didn’t continue.”
The Government’s commitment to the triple lock could lead to a further increase in the state pension age, according to warnings.
Mr Cameron stated: “For those already receiving their state pension, any threat to the triple lock will be bad news. But for those who haven’t yet reached state pension age, the consequence of an ongoing triple lock could be having to wait extra years before receiving their state pension.
“That’s a hard choice, but it’s one we need to face up to as a nation. Undertaking this independent review will allow the Government to set out these choices to the voting public.”
Other financial experts have cautioned that altering the triple lock could have significant repercussions. Lily Megson-Harvey, policy director at advisory group My Pension Expert, said: “The triple lock is clearly an expensive policy and has been a challenge for successive Governments.
“However, the Labour Government must be cautious in how this is tackled as major changes will be difficult to implement without negatively impacting retirees.”
There are also proposals to raise the state pension age from 67 to 68 between 2044 and 2046. However, there are rumours that ministers are considering advancing this change, which could be addressed in the forthcoming review.
The full new state pension currently pays £230.25 a week, or £11,973 a year. To receive the full amount, you typically need 35 years of National Insurance contributions.