New state pension age: when will you retire?
Last updated at 2:36 PM on 14th October 2011
We explain the upcoming rule changes to the state pension age that will see people work longer. Find out when you will be allowed to retire...
Changes: The state pension age is rising for men and women. See how you're affected
For many years the age at which you can claim your state pension benefits has been 65 for men and 60 for women.
But the previous Labour government set out plans, based on recommendations from Lord Turner, to steadily increase the state pension age to 68 for both men and women over the next four decades.
In May 2010, the new coalition Government initially signalled its intent to speed up the process, bringing forward the first rise to 66 for men from 2026 to 2016.
In the end, the Comprehensive Spending Review in October 2010 settled on a less radical option, confirming the rise to 66 for both men and women would come by 2020.
Reprieve over dramatic rise for women
For women, the new rules mean much more dramatic rises than feared. It had been expected that the women's state pension age would rise to 65 by 2020. It will now move to 65 by 2018 and then be hiked to 66 (same as men) by 2020.
It has provoked anger among around 500,000 women in their fifties who would have had to work up to two years longer.
Of the total, around 500,000 will have to wait more than a year, and the worst-hit 33,000 would have to wait two years. Some were in line to lose up to £15,000.
But the Government has offered a reprieve to the 33,000. In October, it said the maximum wait would be eighteen months rather than two years. It will achieve this by moving back the date at which the pension age hits 66 from April to October 2020.
Millions to wait until 67
In September 2011, ministers said the rise to 67 would come even faster than first planned. It is now thought that the pension age for all will hit 67 by 2026 at the latest - it could even be sooner.
It could see eight million people now in their
forties work at least an extra year before they receive
their state pension.
- Sept 2011: State pension age could rise to 67 by 2026
- Oct 2011: Pension age hike to 67 'to be brought forward 10 years'
Pension age liked to life expectancy
In the March 2011 Budget, the Government also revealed plans to link the state pension age to life expectancy in the future.
If the pension age rose from now in line with the change in life expectancy over the past three decades (since 1981), someone born in 1970 could be forced to wait until 71.
A fresh-faced twenty-something starting out in the world of work today could see their state pension age hit 75.
And a seventeen-year-old A-Level student would not be able to retire until 2071 - when they'll be 77. (All figures Standard Life estimates).
›› When will I retire, then?
All men and women under 56 will have to wait at least until 66 before they can retire.
Those born between April 1950 and April 1954 will have their own specific retirement dates that will gradually increase (see below).
After that, we must rely on Labour's existing plans until the Government makes its next move. The previous Labour government's policy
had been to raise the state pension
incrementally to 68 by 2046. It would have hit 67 between 2034
and 2036 and 68 between 2044 and 2046.
See our rough guide to what it means for you below:
MEN - a rough guide
• Under 32s................................. can get state pension at 68*
• Aged between 32 and 41....................... can get state pension at 67*
• Aged between 42 and 56.........................can get state pension at 66/67
• Aged between 56 and 57.......can get state pension at 65 + (see below)
• Older than 57......................can get state pension at 65
WOMEN - a (very) rough guide
• Under 32s..................................can get state pension at 68*
• Aged between 32 and 41.......................can get state pension at 67*
• Aged between 42 and 57....................can get state pension at 66/67
• Aged between 56 and 60.......can get state pension at 60-65 (see below)
• Older than 60..............qualify for state pension at 60
*Warning! These changes are under review and will be altered by the coalition Government. Expect further announcements 'in due course', they say.
So what about if I was born between 1950 and and 1954?
Because the state pension age will be increasing gradually between 2010 and 2020, many men and women will retire at different ages.
The last women to retire at 60 has already done so. Between now and 2016 the retirement age for women will rise to around 63. Then between 2016 and 2018 it will rise to 65.
Then, between 2018 and 2020, the retirement age for both men and women will rise to 66.
After an agonising delay (during which This is Money made its own rough estimate while waiting for the Government to act), the Department for Work and Pensions has finally released the exact new state pension ages.
Note that these proposed changes to the timetable are not yet law and still require the approval of Parliament (as of March 2011).
Read the full report: Official state pension ages revealed at last
Existing timetable for women:
New changes for women AND men
New state pension ages: Click to enlarge the new timetable and see when you will be able to retire
Soon, you should be able to find out exactly when you will be able to claim your State Pension by going to the Pension Service website calculator. [Yet to be updated].
The coalition Government is consulting on making these further rises. Read more about the proposals below.
Moving retirement above 65
The new plan The pension age for both men and women will rise to 66 by 2020 - much sooner than the 2026 target set by Labour. Rises to 68 are expected to be announced soon, with age 70 on the horizon. The previous reforms would have increased pension ages gradually, by two years every decade.
In the 2011 Budget, the Government has announced plans to link the state pension age so that it rises in line with life expectancy, although this will not be 'crude' relationship, the Government says.
An initial target of 70 could be in the Government's mind, experts think. But if life expectancy and improving mortality rates continue at their current levels (a 5.3 year rise in longevity since 1981), the state pension age could hit 77 by 2071. This means a seventeen-year-old A-Level student in 2011 face a 60-year working career before he or she can retire. Any changes will surely be implemented over a long time period, but the implications of linking the pension age to life expectancy are clear: we will all be working much longer.
Your choices at state pension age
When you reach the milestone of the state pension age, you essentially have three choices.
• Cease your working life and get your state pension
• Continue to work and receive your state pension as well
• Carry on working and hold off claiming your state pension
In regards to the final option, if you postpone claiming your state pension, you may get extra state pension when you do finally decide to claim it. And you can put off taking it for as long as you like.
Editor's Blog: Will the retirement age be raised to 70?
When you do eventually decide to take your state pension, you can choose to receive either extra state pension for the rest of your life, or receive a one-off, taxable lump-sum payment, equivalent to the benefits you put off claiming plus interest - as well as your regular weekly state pension.
In addition, you can also choose to stop claiming it after having claimed it for a period. And remember, if you carry on working after state pension age, you don't have to carry on paying National Insurance contributions (NICs).
• For further information on the state pension and changes to the pension rules visit Directgov.
I have just found out via this forecaster that I have got to wait yet another year. I AM SO ANGRY. I have done everything for my part of the contract. I have had enough of being told what I can do by these millionaires. Is it even legal?
- Geoff, Birmingham UK, 15/10/2011 06:52
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