Brits told there is 1 thing they ‘need to do’ ahead of state pension age change | Personal Finance | Finance
Experts have given advice to people ahead of their retirement (Image: Getty)
Speculation continues to build that the State Pension age could increase further over the coming years. While Chancellor Rachel Reeves is not expected to announce a change in her upcoming Autumn Budget, financial experts are warning Brits to be prepared for an increase to the retirement age in the near future.
The State Pension age is currently 66 for both men and women. However, it will be increasing from next year, rising to 67 in stages between April 2026 and April 2028. A recent study of 6,000 people by Standard Life found that over half of people are worried they aren’t saving enough money for their retirement. Meanwhile, just 15% prioritise their pension savings with 47% feeling their retirement finances are outside their control.
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However, financial experts are urging people to “take control of their pensions” and save as much money as possible ahead of possible changes. Alex King, Chartered Accountant and founder of Generation Money, said rising the State Pension age is an “unpopular move” but will have to be done at some point in the future.
He explained: “Across Europe, everyone is looking at how to increase it (the state pension age) to reduce the burden on the fiscal situation. In the UK, the state pension age has already been increased once.
“It’s always an unpopular move to make as it means people have got to work longer to get what other people are already getting. From an economics point of view, it probably has to be done at some point. In fairness to Rachel Reeves, she is in a very difficult situation.”
In Germany, experts recommended Chancellor Friedrich Merz to rise State Pension age to 73 by 2060. He warned that German must be ready to work for longer to support the struggling economy.
The State Pension age will increase to 67 from next year (Image: Getty)
Alex continued: “I would imagine maybe a two-year jump at most could come in here. That will have an impact on the private pension market.
“It will become even more important for people to save into their pensions and maximise all of the reliefs available to make sure all the fees they are paying in are minimised. The burden will shift towards people to save for retirement more so than they already are.
“If that does happen (state pension age increases), then the number one thing people need to start doing is take control of their pensions.”
Tom Johnson, a retirement specialist at Strive Financial Planning, added that while changes to the State Pension age won’t come in immediately, Brits should begin taking a “pragmatic approach”. He is urging people to “put their destiny in their own hands” by maximising their pension savings.
Brits are advised to ‘take control’ of their pension pots ahead of potential changes. (Image: Getty)
He said: “Any changes (to the state pension age) won’t come in immediately. People within five or 10 years of the state pension should have nothing to worry about.
“But other people, for instance someone who is 50 and they change the age to 70, then it’s about taking a pragmatic approach. The advice is always to save as much money as you can in your pension or other vehicles to prepare for it.”
He added: “I don’t think the state pension is going to be enough anyway, whether it’s 67 or 70. Just contributing or speaking with your employer to put as much money into your workplace pension as possible to mitigate against it increasing is important.
“While I don’t think it will increase in the upcoming budget, it will do over the next decade. The advice is the same whether they do it now or do it in the future, people have to prepare for their own retirement and put their destiny in their own hands rather than being given the state pension.”
A recent study showed over 50% of people are worried they haven’t saved enough for their retirement. (Image: Getty)
The government recently dismissed proposals to drop the State Pension age to 60 after an online petition, which was signed by over 18,800 people, was posted on the Petitions Parliament website. The petition also proposed increasing payments to £586 per week.
In a written response to the petition, the Department for Work and Pensions (DWP) said: “The Government is committed to supporting current and future generations of pensioners and giving them the dignity and security they deserve in retirement.
“Our commitment to the Triple Lock through this Parliament will benefit over 12 million pensioners. From the end of this Parliament, spending on the State Pension as a result of our commitment to protect the Triple Lock is forecast to be around £31billion more a year, compared with 2024/25.”
