The government is allegedly thinking about pushing the retirement age up to 68 by 2035 later this year.
While you can retire at any time if you have a personal pension or retirement plan in position, anyone who wants their state pension will have to wait until they reach retirement age.
This means millions would have to work for longer, if prime minister Rishi Sunak and chancellor Jeremy Hunt decided to go ahead with the move in the spring budget in March.
At the moment, the retirement age is 66, but is still set to increase to 67 in 2028.
It was expected to increase again to 68 in 2046, but Sunak and Hunt could bring this forward meaning, it is likely to come into action around 2035, according to The Sun.
This means everyone aged 54 and under (born after April 1971) would have to work for longer until they were entitled to their state pension.
What is the state pension?
The state pension comes from the government.
It is calculated based on an individual’s National Insurance contributions from their time working under the pre-2016 system which gives workers a “starting amount”.
This is the highest option out of either the amount you would get under old state pension rules, or the amount you would get if the new state pension had been in place at the start of your working life.
At the moment, the most you can get on new-style pension is £185.15 a week or £9,627.
If the amount you receive is less than this, you can add more qualifying years to your National Insurance record after April 2016.
The weekly allowance will also increase by 10.1% in April to £203.85, in line with inflation.
Why would the government change state pension age?
Raising the pension age just one year earlier than planned could raise more than £9 billion for the Treasury, saving £8 billion in pension payments and an extra £1.3 billion in taxes on extra earnings, pensions consultancy LCP told The Sun.
This means it would help bring billions back into the economy as the country still teeters on the edge of recession.
An ageing population and falling birth rates mean that the pension age has been increasing gradually over the years already.
However, a government spokesperson told The Sun that “no decision” has been taken yet”, but that a review into the state pension age will be published early this year.
Will this policy go down well?
Work and pensions secretary Mel Stride has reportedly already pushed back over the increase, calling for the change to be pushed back to 2042.
Apparently, Stride has said that predicted increases in life expectancy have not appeared in the wake of the pandemic.
There’s also a potential concern that increasing it to 68 might mean more people may then die without every drawing their pensions, especially in areas where the life expectancy is already particularly low.
The Tory Party in particular is likely to face a backlash because it has a large amount of supporters in the older age range. It faced criticism when it equalised the retirement age for men and women was equalised in 2016.
This week in France, people also rallied on the street when it was announced recently that the retirement age would increase from 62 to 64 – although French president Emmanuel Macron said he has not been deterred from the reforms.
But, there have been calls for even tougher new restrictions on state pension age.
The think tank of former Tory leader Iain Duncan-Smith, called the Centre for Social Justice, has suggested changing the state pension age to 70 by 2028, and 75 by 2035.
It claimed: “The ageing population and the increasing old age dependency ratio is raising serious concerns about the long-term fiscal sustainability in the UK.
“If we expect [the state pension] to continue in the future along with the full functioning of public services...the UK’s fiscal balance must be corrected.”