State pension mysery as retirement age may be hiked to 68 earlier than expected

Pensioners have been issued yet another dire warning as Labour could hike the retirement age to 68 by 2030, an expert has warned.

The state pension age is currently 66 and set to rise to 67 between 2026 and 2028, and again to 68 between 2044 and 2046.

However, alarm bells are now ringing over the possibility that the current Labour government could move to accelerate this increase, allowing them to rake in an extra £6 billion a year.

Lexi Burgess, personal finance expert at free credit-score app CredAbility, told the Express: "There has been ongoing debate about accelerating this timeline to reduce financial pressures on the Treasury, with estimates suggesting an earlier increase to 68 could save around £6 billion annually.

"Labour has hinted that it might consider advancing this change, potentially implementing it as early as the 2030s. These changes could present significant challenges for many individuals.

"Our research shows that 32% of people over 50 have no pension savings beyond the state pension, and the current pension amount falls short of the estimated £14,400 annual income needed for a minimum standard of living."

Burgess added that the move could force elderly people back into work, potentially causing an increase in workplace age discrimination.

She explained: "Accelerating the state pension age increase could force many older workers to delay retirement or return to employment, despite challenges such as declining health or workplace age discrimination.

"The knock-on effects could extend to families, as older individuals may struggle to provide the childcare support often relied upon by younger generations.

"If these proposals move forward, it's important for individuals to prioritise personal retirement planning. Exploring private pensions, maximising workplace contributions, and seeking financial advice can help mitigate the impact of a later state pension age."

This comes after the Express exclusively revealed the government could pocket an extra £6 billion a year by raising the state pension age from 66 to 67 between 2026 and 2028.

According to a report by the Institute for Fiscal Studies (IFS) and pension provider Abrdn, there are groups of pensioners and people reaching retirement age particularly at risk of falling below the poverty line, such as those privately renting.

The report said the government could provide extra support to those who were a year below state pension age and on universal credit, which would cost £600 million a year and reduce poverty in around 30,000 households.

Labour could also increase support only to those receiving both universal credit and health-related benefits, which would cost around £200 million a year and reduce poverty in 3,000 households.

The Department for Work and Pensions has been contacted for comment.