On successive Wages Wednesdays, ICB has mentioned the State Pension age (SPa) review, specifically any increases from the current 66.
Professionally, this impacts us as we move individuals to National Insurance category letter C. Personally, this has wider impacts, for example, the SPa is the age at which individuals qualify for:
- The State Pension;
- The means-tested Pensions Credit; and
- Free bus travel (in England
The Pensions Act 2014 increases the SPa to 67 between 2026 and 2028. The provisions state that people born after 05 April 1960 but before 06 April 1961 will have a SPa of between 66 and 67. Those born after 05 April 1961 will have a SPA of 67. However, the Pensions Act 2007 raises the age from 67 to 68 on a transition basis between 2044 and 2046 meaning that people born from 06 April 1978 onwards will have a SPa of 68.
However, the 2014 Act also requires the UK Government to review the SPa at least every six years. The Review considers evidence from two reports;
1. An independent report on specified factors; and
2. A report from Government Actuary’s Department (GAD) to examine the latest life expectancy projections data
The 2017 Review
The first Review proposed a new timetable for the rise to 68, bringing forward the increase from between 2044 and 2046 to between 2037 and 2039. However, the Review did not result in any changes to legislation but required the second Review to consider this proposal.
The 2021/2022 Review
The second Review was published in March 2023 by the previous UK Government and reported a slowing in the rate of changes to life expectancy. One of the reasons for this was ‘external challenges’ such as the impacts of the COVID-19 pandemic. It concluded:
- The SPA will increase, as planned, from 66 to 67 between 2026 and 2028; and
- A third review will take place ‘within two years of the next Parliament’ to justify whether an increase to 68 should take place as planned or be bought forward
The 2025 Review
On 21 July 2025, the UK Government announced the third Review of the SPa. Again, this will refer to evidence from two reports, an independent one and one from the GAD. It is the Terms of Reference for the GAD report that specifically asks for an examination of the latest life expectancy data to ensure that individuals spend a ‘specified period’ in receipt of the State Pension of between 30% and 32%. As per the 2014 Act, this means the average period of adult life an individual can expect to be in retirement and in receipt of the State Pension, with 20 being the age at which adult life begins.
For Bookkeepers
This is what we know for certain:
- The State Pension age will increase to 67 between 2026 and 2028 (as per the 2007 Act, confirmed in 2023 by the previous Secretary of State for Work and Pensions); and
- The State Pensions age will increase to 68 between 2044 and 2046 as per the 20077 Act BUT this increase and future pensionable age changes will be influenced by the third review
