Liz Kendall recently warned of a potential “tsunami of pensioner poverty” as UK workers fail to save enough for retirement or opt not to save at all.
The Secretary of State for Work and Pensions also used the revival of the Pensions Commission to confirm she was launching an early review into the State Pension Age.
Kendall also spoke about the State Pension triple lock, confirming it currently costs £31 billion and leading some to suggest a future change is in the offing.
Keep reading for the latest on potential changes to the State Pension and how they could affect you.
State Pension changes are only one part of a wider government-led pension review
In its 2024 manifesto, the Labour Party promised a full pension review, which would consider the steps needed to improve security in retirement and increase UK investment.
In July of the same year, the “Pension Schemes Bill” introduced several changes designed to streamline pensions and improve outcomes for savers.
More recently, news came that the government plans to revive the Tony Blair-era Pensions Commission. Originally responsible for the recommendation that led to auto-enrolment, the commission is being relaunched to tackle the growing number of people who could struggle to make ends meet in retirement – the “tsunami of pensioner poverty”.
Alongside proposals to lower the age for auto-enrolment and increase the minimum contribution, it has also been suggested that so-called “sidecar savings” could be made available from your pension pot, up to a set amount, for use in emergencies.
A review of the current State Pension Age was also officially launched. While the triple lock was confirmed as “out of scope”, Kendall’s mention of its cost has led to some speculation among commentators and experts.
The State Pension Age is rising to 67, but a further rise could also be brought forward
Since the 2014 Pension Act, there has been a statutory requirement to review the State Pension Age at least every six years. Previous reviews have taken place in 2017 and 2023, so the July 2025 announcement marks an early next review.
The State Pension Age is set at 66 but is scheduled to rise to 67 between 2026 and 2028.
A further rise to 68 is set for between 2044 and 2046, but this is expected to be brought forward to at least the 2030s.
This could have a significant impact on your retirement planning.
The State Pension could be the foundation on which your dream retirement is built
While your State Pension might not be the largest regular income you receive in retirement, its guaranteed payments could prove to be the backbone of your plans.
Not only do you receive regular amounts, but they increase each year to combat the effects of a rising cost of living. This makes them perfect for known expenses like your mortgage, and for slowly rising outgoings like groceries and bills.
The triple lock ensures that the amount you receive rises each year by the highest of:
- Average wage growth
- Inflation
- 2.5%.
In 2025/26, the full new State Pension is £230.25 a week, or £11,973 a year.
To receive this amount, you’ll typically need 35 “qualifying years” of National Insurance contributions (NICs). If you have between 10 and 35 years, you’ll receive a portion of the State Pension. Less than 10 years, meanwhile, and you won’t receive a State Pension at all.
Check your record to see how many qualifying years you currently have and how much you might be able to receive at State Pension Age.
Receiving the full State Pension amount and setting this aside to cover known expenses could give you the freedom to use other income – from a workplace pension, other investments, or rental from buy-to-let properties, for example – for luxuries and non-essential purchases.
Legislative change will occur, but a robust and adaptable plan can cope
Changes to pension rules and legislation occur all the time, and future amendments to the State Pension Age are inevitable. This is why it’s so important that your long-term financial plans are robust, adaptable, and aligned to your long-term aims.
As long as your ultimate goal hasn’t changed, it’s unlikely your plan will need to. But neither is your plan set in stone.
Working with Jane Smith Financial Planning means that you’ll have peace of mind that your future is in safe hands, whatever government changes arrive. In the meantime, though, if you have questions about proposed changes or any aspect of your retirement, get in touch.
Get in touch
If you’re looking for an independent financial adviser in Milton Keynes or Olney, look no further. At Jane Smith Financial Planning, we’ve been helping clients for 30 years, so contact us at info@janesmithfinancial.com or call 01234 713131 to see what we can do for you.
Please note
This article is for general information only and does not constitute advice. The information is aimed at retail clients only.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available. Past performance is not a reliable indicator of future performance. The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
Production