State pension age could rise sooner for five million workers under Labour proposals

Around five million Generation X workers could see their state pension age pushed back by up to a year under Treasury proposals currently being considered in Whitehall.

The Office for Budget Responsibility has been told that the planned rise in the state pension age to 68, currently scheduled for between April 2044 and April 2046, could instead be brought forward to between 2037 and 2039.

Workers aged between 49 and 55 would be most affected.

An independent review recommended accelerating the increase, meaning those impacted could either remain in work for an additional year or lose more than £12,500, based on the current value of a full year of the new state pension.

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Ministers say no final decision has been made.

Generation X refers to the demographic cohort of people born roughly between 1965 and 1980.

Rob Perrie, a 55‑year‑old self‑employed builder and part‑time DJ from Cheshunt, Hertfordshire, said he had expected to begin receiving his state pension at 67 before reports of the proposed change emerged.

Despite owning five properties, he only began contributing to a private pension a decade ago and has built up a pot worth around £170,000.

He has now increased his contributions to £200 a week.

Mr Perrie said: “I invested in property but I am scared there won’t be any state pension for me when I am old enough. I am throwing as much money as I can into it.

“I feel like the Government will just keep on raising the state retirement age until you die and you won’t get anything back you’ve paid in.”

Alfred Ackah Enyimah, a 49‑year‑old hospital porter from north London, said delaying access to the state pension would leave him with little choice but to work longer.

With limited savings, he said: “I’ve been working towards a particular timeline and delaying access to the state pension by a year could leave a significant gap in my finances.”

He said he understood the pressures created by an ageing population but questioned the impact on lower‑paid workers. “I work in a hospital and I don’t make much.

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"I will have to increase my hours, taking more night shifts wherever possible.”

Catherine Foot, director of the Standard Life Centre for the Future of Retirement, said the state pension remained a vital source of income.

“The state pension remains a critical source of retirement income for millions of people,” she said.

The reports, she added, reflect “the difficult balancing act Government faces in keeping the system affordable while people live longer, and ensuring it remains fair and adequate for those who rely on it.”

The Institute for Fiscal Studies has warned the Treasury to communicate any changes promptly so affected workers have enough time to adjust their retirement plans.

Early notice, it said, would be essential for the millions who may need to reconsider how they fund retirement.

Wealth manager Quilter estimates that a 49‑year‑old could build enough savings to replace one year of state pension by contributing just over £50 a month into a private pension, assuming basic‑rate tax relief, investment growth and projected increases in the state pension.

For a 55‑year‑old, the equivalent monthly contribution would rise to around £75.

Adam Cole, of Quilter, said workers should not rely solely on the state pension.

“Small, regular pension contributions, combined with tax relief and investment growth over time, can provide valuable flexibility and help reduce dependence on an increasingly stretched state pension system,” he said.

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