Nearly three million people in the UK may be forced to delay their retirement plans as the government considers bringing forward the rise in the state pension age to 68. This proposal has sparked widespread concern, particularly among workers in their late 40s and early 50s who may find themselves having to work longer than previously expected.

The state pension age is currently set to rise to 67 by 2028, and under existing legislation, it would increase again to 68 between 2044 and 2046. However, mounting financial pressures on the UK’s public finances have prompted the government to accelerate this timeline — potentially shifting the age rise to as early as 2039. This could affect those born between April 1970 and April 1978, placing them directly in the firing line of the proposed changes.

Why Is the Pension Age Rising?

The UK’s ageing population is placing an increasing burden on the state pension system. Life expectancy has improved significantly over the past decades, and people are spending more years in retirement. According to the Department for Work and Pensions (DWP), in 1948 when the state pension was first introduced average life expectancy was just 66 for men and 70 for women. Today, those numbers are closer to 79 and 83 respectively.

As a result, the government has been under pressure to ensure the sustainability of pension funding. A review by the Government Actuary’s Department suggests the state pension age should keep pace with longevity to maintain affordability. The full DWP pension age review can be accessed here.

Chancellor Rachel Reeves is reportedly facing a £22 billion budget shortfall in future pension commitments, which has pushed the Treasury to explore cost-saving measures. One of these includes potentially restricting Winter Fuel Payments for wealthier pensioners a move that could affect around 10 million people.

How Will This Affect Workers?

The potential hike in pension age means that many who expected to retire at 67 could now be required to work an additional year or more. According to a report by Phoenix Insights, nearly three million people could be directly affected by the change. The report warns that “not everyone will be able to work until the higher state pension age,” due to health issues or the physical nature of their job.

The findings underscore the importance of supporting individuals who may not be able to extend their careers. Some may have to rely more heavily on personal pensions, savings, or continue working in part-time roles if the state pension is pushed further out of reach.

A Reminder of the WASPI Controversy

This new development also brings back memories of the Women Against State Pension Inequality (WASPI) campaign. Thousands of women born in the 1950s were affected when their state pension age was increased with inadequate notice, leaving many unprepared for the sudden changes.

In March 2024, the Parliamentary and Health Service Ombudsman found that the DWP failed to properly communicate the changes to the affected women, leading to calls for compensation. You can read the full ruling here.

Despite the findings, Labour leader Keir Starmer recently stated that full compensation for all affected women would be “unaffordable,” citing the strain it would place on public finances. This statement was met with disappointment by campaigners who continue to fight for justice.

What Is the Triple Lock and Is It at Risk?

Another key concern tied to the pension age debate is the future of the state pension triple lock. The triple lock guarantees that the state pension increases each year by the highest of inflation, average earnings growth, or 2.5%.

While the current government has pledged to uphold it, critics argue that it may not be sustainable in the long term especially with the growing pensioner population and broader economic challenges. Any decision to alter or scrap the triple lock would be politically sensitive, particularly in the run-up to the next general election.

You can find more information about the triple lock policy on the official government page here.

What Can Affected Workers Do?

Those who may be affected by a change in the state pension age are encouraged to review their retirement plans and explore alternative income options. The government’s Check your State Pension forecast tool allows individuals to see when they can claim and how much they’re likely to receive.

Financial advisors suggest that people in their 40s and 50s consider increasing personal pension contributions, looking into workplace pension schemes, and even planning for phased retirement such as reducing hours rather than stopping work entirely.

Final Thought

No final decision has yet been made. The government is currently reviewing its long-term pension strategy and is expected to consult with stakeholders before confirming any changes to the pension age. However, with fiscal pressures mounting and the need to balance the budget, many experts believe the rise to 68 is inevitable it’s just a question of when.

As the political and public debate intensifies, it will be crucial for the government to ensure transparency, provide sufficient notice to those affected, and avoid repeating past mistakes such as the mishandling of the WASPI generation.