The State Pension Age rise from 67 to 68 has been brough forward by seven years, and is now due to start being phased in 2037.
The age rise was shcedules to occurr between 2044 and 2046, but following John Cridland’s review in March, the government accepted the recommendation to bring it forward.
The government said the change would save the taxpayer £74 billion by 2045/46.
Why it’s important
Your State Pension Age is important as it’s the earliest you can start receiving your State Pension built up throughout your working life.
[Read more: Pension freedoms − 5 ways they are costing you more]
What it means for you
Around 5.8 million men and women born between April 6, 1970 and April 5, 1978 will be impacted by the plan to bring forward when the State Pension age increases.
The State Pension Age for this group is currently 67 but will increase to between 67 years and one month and 68 years depending on date of birth.
So, if you’re aged between 39 and 47 you will have to wait up to a year longer before you can claim your hard-earned State Pension.
However, the new proposal won’t impact anyone born on or before April 5, 1970 or anyone born on or after April 6, 1978.
You can check your current State Pension Age online.
Why is the State Pension Age changing?
The State Pension Age will now be regularly put under review, to make sure it is sustainable and fair, which means there could be further rises impacting other age groups.
A report by the government’s Actuary Department in March suggested that those under the age of 30 may have to wait until 70 before they qualify for the State Pension.
As we’re living longer we’re spending more of our adult lives in retirement, which the government has to pay for.
When the State Pension was introduced in 1948, a 65-year-old would typically claim it for 13.5 years, which was about 23% of their adult life.
Now in 2017, a 65-year-old will typically claim the State Pension for 22.8 years, or 33.6% of their adult life.
The government wants to make changes so that the State Pension is more sustainable and fair to all generations, and aims to bring down the life spent in retirement to 32%.
[Read more: How to get good pension advice for your retirement funds]
What you can do now
The government will try to legislate the change in 2023 to ensure the latest life expectancy figures are used.
If you’re between 39 and 47, you can take action to retire at an age that suits you now.
You can access a workplace or personal pension at 55, well before the State Pension, so it’s a good idea to top up your contributions.