State pensioners issued major warning as 5m face £16,500 shortfall | UK | News
State pensioners have been warned of a potential £16,500 shortfall. This could affect up to five million people, leaving them each £16,500 out of pocket. The government is considering putting forward plans to increase the age of people eligible to withdraw their pension by seven years.
If approved, the gradually increasing retirement age could leave retirees out of pocket for their retirement savings. Fast-tracking the increase in the retirement age, which will reach 67 in April 2028 and could rise again later, could leave retirees out of pocket sooner than expected.
Predictions from the government’s “current policy” see the state pension age rising to 68 between 2037 and 2039, seven years earlier than planned.
If this change occurs, those aged between 49 and 55 will have to wait another year to get their state pension back. By that measure, they would be £12,500 short. However, this figure is given without taking into account the Triple Lock warranty.
Pensioners are currently guaranteed an increase in line with inflation, earnings growth or 2.5%, whichever is higher. Sun reported. Experts have warned that if growth continues at a minimum level of 2.5% for the next 11 years, that £12,500 total could balloon to a loss of £16,500.
The executive director of the Center for Better Aging, Dr. Carole Easton believes the move is “extremely worrying”.
He said: “For many people their 60s are a time of great financial stress and they live desperately hoping they will have enough resources until they reach retirement age. The government should not try to prolong the pain.”
Think tank Standard Living Center for the Future of Retirement added that twice as many low-income earners will see their household finances hit than higher-income earners.
A Treasury spokesman denied there were plans to bring forward the age increase. They said: “The law continues to increase the state pension age to 68 in 2044. In July 2025, we announced the launch of the third review of the state pension age, as required by the legislation.”
