State pension age just went up – but what does it mean to you?

 

At £241.30 a week, the full New State Pension may not be enough for most people to live on, but it can make an important contribution to their retirement plans. However, for those reaching state pension age before April 2016, the basic State Pension is lower, rising to £184.90 a week from 6 April 2026.

But even these sums are moving further out of reach. With a growing older population, the government is seeking ways to manage rising costs. As of 6 April 2026, the State Pension age begins its phased transition from 66 to 67. This shift will be completed by 2028, affecting anyone born after April 1960.

While the state pension age of 65 was set when life expectancy was much shorter, the landscape is changing again. Although we generally live longer than previous generations, recent data from the Office for National Statistics (2026) shows that healthy life expectancy—the years we spend in good health—has actually declined to its lowest level since 2011. This means many of us may face more years of ill health before we even qualify for state support.

Ministers have previously discussed bringing the rise to age 68 forward to the late 2030s. While a final decision on that specific acceleration is currently under government review, the trajectory is clear: if you are early in your career, you should prepare for a state pension age of 70 or beyond.

Taking out a private pension

The state pension alone is rarely sufficient for a comfortable lifestyle. The current rise in the state pension age to 67 is a timely reminder to check if your personal savings are on track.

A private pension plan offers a path to a more flexible retirement. Currently, you can access these funds from age 55, but you must plan for the Normal Minimum Pension Age (NMPA) rising to 57 on 6 April 2028. Unless you have “protected rights” within your specific scheme, anyone currently under age 53 will likely have to wait longer to touch their private pots.

Are your current pension plans going to provide the retirement you want? Find out with a free pension assessment.

A private pension is independent of your state pension, and any pension you may get from your employer. If you are an employee, you will almost certainly have an employer’s pension plan working for you under Automatic Enrolment rules. Making the most of these is a very worthwhile tactic, as your employer will, in most cases, have to make contributions for you alongside those you make yourself. But the returns you enjoy when retirement comes may not be as great as you wish, and if you decide to work for yourself, you will no longer have an employer contributing to your future.

A private personal pension avoids these worries. You will be responsible for making regular contributions to your funds – but although you will not have an employer saving with you,  you will still have an even more valuable ally in the shape of the taxman.

The government wants you to ease the burden on the state in your old age, so it provide generous tax relief, which means that every pound in your pension fund costs you much less than a pound to put in.

This means that pension funds can be very rewarding investments. The money you put in is boosted by the taxman, and in many cases by the skills of investment managers and by the wonders of compound interest as the years go by.

It’s never too early to start, and the sooner you do the less it will cost to retire on your terms. Starting a pension in your 20s might seem premature. You will have plenty of other ways to spend your cash, but the earlier you start saving for retirement the earlier you may be able to do it – whatever happens to the state pension.

Getting the help you need

Of course, like any other financial arrangement, it pays to get professional help. There are many pension providers, some seem to offer better performance than others, some which let you share in the choice of how your money is invested, and some who will let you sit back and watch as their experts take care of everything.

Finding the plan that is right for you will be much easier with help from a Continuum Adviser, who knows the market, the various pension providers within it and who will get to know you and your own financial plans and circumstances.

The information contained in this article is based on the opinion of Continuum and does not constitute financial advice or a recommendation to suitable retirement strategy, you should seek independent financial advice before embarking on any course of action.

The Financial Conduct Authority does not regulate taxation advice

Accessing pension benefits early may impact on levels of retirement income and your entitlement to certain means tested benefits.

Accessing pension benefits is not suitable for everyone. You should seek advice to understand your options at retirement.

 

https://www.kingsfund.org.uk/publications/whats-happening-life-expectancy-uk