Millions of people born after 5 December 1953 will see their state pension age rise from today (6 December) as a result of reforms designed to cut billions from the UK’s welfare bill.
The move represents the first state pension increase for men since the current system was introduced in 1948.
For some women, however, this is simply another state pension age rise. The Pensions Act 1995 meant the state pension age for women would increase from 60 to 65 between April 2010 and 2020, bringing it into line with their male counterparts’ state retirement age.
Some affected women born in the 1950s have argued they have been hit particularly hard by the change.
Under plans set out by the coalition government in 2011, the state pension age for both sexes will gradually increase from 65 to 66 between 6 December 2018 and 6 October 2020.
The increase is being introduced incrementally, meaning people will experience different state pension ages depending on when they were born.
Those born from 6 December 1953 to 5 January 1954 will have a state pension age triggering point of 6 March 2019, so some retirees-in-waiting have to wait up to three months longer to start receiving payment. Those born later will see a larger increase depending on their date of birth (see table below).
The state pension age is then due to increase to 67 by 2028 and 68 by 2039.
Source: The Department for Work and Pensions
AJ Bell senior analyst Tom Selby highlighted what the change could mean for people’s near-term finances saying: “At the lower end, a three-month rise in the state pension age could cost someone over £2,000 in retirement income. Those who have to wait a full year longer could miss out on over £8,000 in state pension.
“While this might feel like a cruel lottery for those immediately affected, younger generations will need to prepare for rises in the state pension age to 67 and 68. Indeed, if life expectancy continues its long-term trend upwards, a state pension age of 70 could well be on the cards.”
Centre for Ageing Better evidence manager Aideen Young urged employers to talk to and support their staff as the changes take affect.
“We often hear that, following the removal of the default retirement age, employers have become worried about talking to older workers about retiring for fear of being ageist, and yet employers have a pivotal and very positive role to play to support people to think about and plan for any major life transition,” she said.
“As working patterns change and become more fluid, the need for support and guidance to help people think about their future only increases.”