Retirement is a new and exciting stage in life that many look forward to, as it comes with a renewed sense of freedom to control one’s time and pursue personal interests. However, if you have already started planning trips for after you retire, then those plans will either have to change or possibly be cancelled. The 66 era is ending, and the DWP’s 2026 age change will leave millions rattled. Find out today what the change entails and how it could affect you and all your plans for the future.
Change is happening all over the world
Retirement ages are increasing globally. Several factors play a key role in these increases, and according to a report by The World Economic Forum, these factors include:
- Societal and health factors
- Older people in general have improved health these days, making it more practical for them to remain in the workforce longer
- The transition to retirement takes longer, during which people continue to work to maintain financial security
- Demographic and financial pressures
- Life expectancies are higher and birth rates are lower, creating an imbalance
- People work longer to accumulate sufficient savings for financial security in retirement
- Government policy and economic incentives
- Raising the retirement age ensures the economic sustainability of social security and pension systems
The UK is no exception, as the Department for Work and Pensions (DWP) will also be implementing a change to the State Pension age, which will affect millions of hopeful retirees in the UK as a result.
The end of the UK’s 66 retirement era
According to a Daily Record report, the Pensions Act of 2014 warrants a regular review of the State Pension age, which must occur at least once every five years. The review focuses on the concept that people must have the ability to spend a certain amount of their adulthood receiving a State Pension. The review typically considers factors such as life expectancy.
After the review’s report has been received, the UK Government may change the State Pension age, and the DWP has confirmed that this will be the case next year. The new age will be 67, and will be fully implemented for all Britons by 2028. The new State Pension age will make the taste of potential victory from the petition to increase the State Pension a little less sweet.
The following individuals will be able to claim the State Pension at age 67
- People born between 6 March 1961 and 5 April 1977
The implications of the increased age
If you already have your retirement plan in place, ensure that you are up to date with all the forthcoming changes. The DWP will be distributing formal notices to all who will be affected by the changes to their State Pension age. These planned changes have been in legislation since 2014, and the upcoming change will not be the last.
Britons can expect another retirement age increase between 2044 and 2046, during which age will increase from 67 to 68. For many, the increased age not only delays retirement plans, but it will also prevent them from benefiting from this “Triple lock” guarantee for pensioners. With the excruciatingly high cost of living, the increase in the State Pension would have been a welcome additional income.
