The OBR State Pension Age Change has become an important issue in 2026 as the UK begins its phased increase in State Pension age from 66 to 67, while a separate review considers what should happen in future decades.
For people approaching retirement, the debate is about much more than a change of age. Delaying access to the State Pension can affect household income, employment decisions, benefit entitlement and the amount people need to take from private pensions or savings.
The Government is also facing questions about whether State Pension age should eventually rise to 68 earlier than the date currently written into legislation. Meanwhile, calls to reduce the age to 65 have been rejected by the Government.
Why Is The State Pension Age Change Making Headlines In 2026?
The State Pension age is making headlines because the previously legislated increase from 66 to 67 has now started.
The transition began in April 2026 and is scheduled to continue until spring 2028. Instead of everyone immediately moving from a pension age of 66 to 67, the qualifying age increases gradually depending on a person’s date of birth.
There is also a much wider debate over what happens after age 67.
The OBR’s latest long-term modelling assumes State Pension age reaches 68 between 2037 and 2039, while existing legislation provides for the increase to 68 much later, between 2044 and 2046.
The ongoing third State Pension Age Review will examine the timetable for future changes.
Another reason the issue has attracted attention is the financial impact on people who cannot continue working until the higher pension age.
Evidence from the previous increase suggests that delaying State Pension entitlement can increase employment for some people while creating serious income pressures for others.
What Is Changing To The UK State Pension Age From 66 To 67?
The State Pension age is gradually increasing from 66 to 67 between April 2026 and spring 2028.
People born during the transition period do not necessarily have to wait until their exact 67th birthday. Instead, their State Pension age increases in monthly stages.
For example:
- People Born Between 6 April and 5 May 1960 Reach State Pension age at 66 years and one month
- People Born Between 6 September and 5 October 1960 reach it at 66 years and six months
- People Born Between 6 February and 5 March 1961 reach it at 66 years and 11 months
- People Born From 6 March 1961 generally have a State Pension age of 67 under the current timetable
The increase was legislated through the Pensions Act 2014. It is therefore important to distinguish between the Government’s pension-age policy and the OBR’s role.
The OBR does not decide when people can receive their State Pension. It independently assesses the economic and public-finance consequences of policies.
Who Will Be Affected By The State Pension Age Change?
The immediate transition mainly affects people born from 6 April 1960 onwards, particularly those born between 6 April 1960 and 5 March 1961.
Someone who had planned their retirement around receiving the State Pension at 66 could therefore need to finance several additional months before becoming eligible.
The effect will differ considerably between households.
Someone who remains in secure employment may continue receiving wages and potentially build additional workplace pension savings.
Someone who has already stopped working because of poor health, redundancy, caring responsibilities or the physical demands of their occupation could face a much more difficult period.
That difference is central to the debate about whether future State Pension age increases are financially sustainable for individuals as well as for the Government.
How Will The State Pension Age Change Affect People?
The most obvious effect is that affected people must wait longer before receiving State Pension payments.
For someone without sufficient employment income or private retirement savings, even a delay of several months can make a major difference.
Possible consequences include:
- Working For Longer To maintain income until State Pension entitlement begins
- Using Savings Earlier To cover everyday expenses before reaching pension age
- Accessing Private Pensions Earlier Which could reduce income available later in retirement
- Claiming Working-Age Benefits Where eligibility conditions are met
- Delaying Retirement Plans Because expected State Pension income begins later
- Changing Working Hours If full-time employment becomes difficult before State Pension age
The impact is particularly important because many people are already outside paid employment before reaching State Pension age. The Work and Pensions Committee reported that 57% of people were not in paid work during the year before State Pension age.
For these households, raising State Pension age does not necessarily mean an additional year of wages. It can instead mean an additional period without State Pension income.
How Crucial Is The State Pension Payment For People Approaching Retirement?
For millions of people, the State Pension forms an important part of retirement income.
The full new State Pension is £241.30 a week in 2026/27, although the actual amount a person receives depends on their National Insurance record.
That full rate is equivalent to more than £12,500 a year.
Not every pensioner has a large workplace pension, private pension portfolio, property income or substantial savings. This means the State Pension can provide the foundation on which the rest of a person’s retirement finances depend.
The importance becomes clearer when compared with working-age support.
A single Universal Credit claimant aged 25 or over has a standard allowance of £424.90 a month in 2026/27, before additional elements, earnings adjustments and deductions.
The Pension Credit standard minimum guarantee for an eligible single pensioner is £238 a week.
The difference helps explain why people who cannot work during the period immediately before State Pension age can face greater financial pressure.
Is The State Pension Age Rising To 68 In 2037 Or 2044?
This is one of the most confusing parts of the current State Pension debate.
Existing legislation provides for the State Pension age to increase to 68 between 2044 and 2046.
However, the OBR’s July 2026 long-term fiscal projections assume that the increase to 68 happens much earlier, between 2037 and 2039.
The OBR describes the earlier timetable as the Government’s current policy position for the purposes of its long-term projections. However, the statutory timetable has not yet been changed to 2037 to 2039.
The Government has also confirmed that the third State Pension Age Review will consider the timetable for future pension-age changes and that no final decisions arising from that review have yet been made.
Therefore, people should not interpret the OBR’s 2037 to 2039 assumption as meaning that Parliament has already changed the legal State Pension age timetable.
What Is The Third State Pension Age Review Looking At?
The third State Pension Age Review was launched in July 2025 as required under the Pensions Act 2014.
Its purpose is to consider whether the rules determining State Pension age remain appropriate for future decades.
The review includes an independent report led by Dr Suzy Morrissey and analysis from the Government Actuary’s Department examining the latest life expectancy projections.
Issues being considered include:
- Life Expectancy And how long people are expected to spend in retirement
- Intergenerational Fairness Between younger taxpayers and future pensioners
- Fiscal Sustainability And the long-term cost of the State Pension
- Regional And Social Differences In people’s ability to work longer
- International Experience Of mechanisms linking pension age with demographic changes
- Impact On Different Groups Including people with different health, income and employment circumstances
The review is significant because the UK population is ageing while State Pension expenditure is projected to become an increasingly large part of public spending.
When Will The State Pension Age Review Be Completed?
The third State Pension Age Review must report by the end of March 2029.
The Government confirmed this deadline in a parliamentary answer on 6 October 2026. It also said that no decisions had yet been made about the timetable for future State Pension age changes.
This means headlines suggesting that every future increase has already been finalised should be treated carefully.
The rise from 66 to 67 is already legislated and underway. The question of what happens to the timetable beyond 67 remains part of the longer-term policy debate.
Has The Government Rejected Calls To Reduce The State Pension Age To 65?
Yes. The Government has said that it has no plans to reduce the State Pension age to 65.
A parliamentary petition calling for State Pension age to be reduced to 65 argued that people aged between 65 and 67 can face poor health, caring responsibilities and limited opportunities to remain in employment.
The Government formally responded on 13 October 2026, saying it had no plans to lower State Pension age.
The Government’s position is that increasing longevity and an ageing population create financial pressures that must be considered when setting pension age.
It has pointed out that, in 2026, a man aged 66 is expected on average to live another 19.3 years, while a woman of the same age is expected to live another 21.9 years.
However, average national life expectancy does not show the full picture. Healthy life expectancy and people’s ability to remain in employment can differ substantially depending on health, occupation, income and location.
How Much Could The State Pension Age Rise Save The Government?
The financial impact is one of the main reasons the OBR State Pension Age Change has received so much attention.
For the rise from 66 to 67, the OBR estimated a £10.5 billion reduction in government borrowing in 2029/30 compared with a situation where State Pension age remained at 66.
The estimate includes approximately:
- £10.2 Billion From around 820,000 fewer 66-year-olds receiving the State Pension
- £0.2 Billion From reduced spending on Pension Credit and Winter Fuel Payment
- £0.9 Billion In additional tax receipts if more people remain in employment
- £0.7 Billion Extra Spending On Universal Credit, partly offsetting the savings
These figures illustrate why State Pension age has such a large effect on public finances.
What Is Behind The OBR’s £10.5 Billion Saving Estimate?
The saving is not simply the result of cancelling one year of pension payments.
The OBR considers several effects at the same time.
The Government spends less because fewer people receive the State Pension and some pensioner benefits at age 66. At the same time, some people remain in employment and pay more tax.
However, other people become more dependent on working-age benefits such as Universal Credit, which increases expenditure elsewhere.
The estimate is therefore a net fiscal effect rather than a guaranteed cash saving.
Behaviour also matters. If fewer people than expected remain in employment, tax receipts could be lower. If more people qualify for health-related or working-age support, benefit expenditure could be higher.
How Much Could Delaying The Rise To 68 Cost?
The OBR’s July 2026 long-term projections provide another important figure.
Its baseline assumes the State Pension age rises to 68 between 2037 and 2039.
The OBR estimates that if the increase instead occurred according to the later legislated timetable, delaying the rise would cost the public finances an average of around £6 billion in today’s terms in each affected year.
This explains why future pension age decisions are important to the Treasury.
However, fiscal savings are only one side of the decision. Policymakers must also consider whether people can realistically continue working, how long different groups live in good health and what support is available to those unable to work.
Why Could A Higher State Pension Age Increase Poverty?
The risk arises when people lose access to pension-age income but cannot replace it through employment.
Evidence from the previous rise in State Pension age illustrates the problem.
When State Pension age increased from 65 to 66, the income poverty rate among affected 65-year-olds increased from 10% to 24%. The Work and Pensions Committee said this represented around 100,000 people falling below the poverty line.
People particularly vulnerable to an increase may include those with:
- Long-Term Health Conditions
- Disabilities Affecting Their Ability To Work
- Physically Demanding Occupations
- Unpaid Caring Responsibilities
- Limited Private Pension Savings
- Difficulty Finding Employment At Older Ages
There are also geographical differences.
People in areas with lower healthy life expectancy may find it much harder to remain in employment into their late 60s than healthier workers living elsewhere.
What Happened When The State Pension Age Previously Rose From 65 To 66?
The earlier increase provides one of the strongest pieces of evidence about what could happen when pension eligibility is delayed.
Employment among older people increased. A DWP evaluation cited by the OBR estimated that approximately 55,000 additional 65-year-olds entered or remained in employment, while average earnings across the age group increased.
However, the increase did not benefit everyone equally.
Some people were able to work longer and continue earning. Others who could not work lost access to pension income without receiving enough additional earnings to compensate.
This is why employment figures alone cannot measure the effect of a State Pension age increase. Policymakers also need to consider household income, poverty, health and benefit dependency.
How Does Universal Credit Compare With State Pension And Pension Credit?
Universal Credit can provide support for some people who have not yet reached State Pension age, but it is not a direct replacement for the State Pension.
For 2026/27:
| Payment | Standard Amount |
| Full New State Pension | £241.30 A Week |
| Pension Credit Minimum Guarantee For A Single Person | £238 A Week |
| Universal Credit Standard Allowance For A Single Person Aged 25 Or Over | £424.90 A Month |
Universal Credit awards can be higher where a claimant qualifies for additional support relating to housing, children, caring responsibilities or health conditions.
However, Universal Credit is means-tested and can be affected by earnings, savings and household circumstances.
State Pension entitlement works differently and is largely based on a person’s National Insurance record.
Could Older People Receive More Support Before Reaching State Pension Age?
There have been calls for additional support for people approaching State Pension age who cannot continue working.
The Work and Pensions Committee has suggested examining whether Universal Credit should be increased during the period immediately before State Pension age.
One proposal involved providing additional support to 66-year-olds as the pension age rises to 67.
Another longer-term option would involve increasing support gradually for some older claimants who are unable to work because of poor health, disability or caring responsibilities.
These are policy proposals rather than confirmed payments.
People should therefore base their financial planning on benefits and pension rules that are currently in force rather than assuming additional support will be introduced.
How Could The State Pension Age Change Affect UK Employers And Older Workers?
The debate also has consequences for businesses.
If people are expected to remain economically active for longer, employers may need to consider how work is structured for employees approaching their late 60s.
This could increase the importance of:
- Flexible Working For employees reducing hours before retirement
- Workplace Adjustments For workers experiencing health or mobility difficulties
- Occupational Health Support To help employees remain in appropriate roles
- Retraining And Reskilling For older workers whose existing roles become difficult
- Succession Planning Where employees remain in their positions longer than previously expected
- Retirement Planning Support To help workers understand workplace pensions and transition options
For businesses facing skills shortages, retaining experienced employees for longer could offer advantages.
However, assuming that every employee can simply continue working until a higher pension age would ignore the significant differences between office-based, manual and physically demanding occupations.
What Should People Approaching State Pension Age Do Now?
People nearing retirement should first establish their own State Pension age rather than relying on general headlines.
Useful steps include:
- Check The Exact State Pension Age Based on date of birth
- Review the State Pension Forecast to understand expected entitlement
- Check the National Insurance Record For gaps that could affect the pension amount
- Review Workplace And Private Pensions Before deciding when to access them
- Consider The Income Gap Between leaving work and receiving the State Pension
- Check Benefit Entitlement If employment ends before State Pension age
- Plan Carefully Before Using Savings Intended to support a long retirement
People should also be cautious about taking large amounts from private pensions simply to bridge a temporary income gap without considering the tax consequences and effect on future retirement income.
OBR State Pension Age Change: Confirmed Changes Vs Possible Future Changes
| Issue | Position In October 2026 |
| State Pension Age Rising From 66 To 67 | Confirmed And Underway |
| Transition To Age 67 Completed | Spring 2028 |
| Reduce State Pension Age To 65 | Government Says It Has No Plans To Do So |
| Current Legislated Rise To 68 | 2044 To 2046 |
| OBR Long-Term Assumption For Age 68 | 2037 To 2039 |
| Third State Pension Age Review | Underway |
| Review Deadline | End Of March 2029 |
| Final Future Timetable Following The Review | Not Yet Decided |
The distinction between what is law, what is an OBR modelling assumption, what is the Government’s current policy position, and what remains under review is important.
Conclusion
The OBR State Pension Age Change debate has become more important in 2026 because the increase from 66 to 67 is no longer a distant proposal. The transition has started and is already changing when affected people can receive their State Pension.
For the Government, increasing State Pension age can produce major savings and potentially keep more people in employment.
For individuals, however, the effect depends heavily on health, employment, savings and access to private pensions.
The next major question concerns age 68. Current legislation provides for an increase between 2044 and 2046, while the OBR’s long-term modelling assumes a 2037 to 2039 timetable.
The third State Pension Age Review is expected to provide further evidence before reporting by the end of March 2029.
Until future changes are formally decided, people approaching retirement should focus on their confirmed State Pension age, National Insurance record, expected pension entitlement and the resources available to cover any period between leaving employment and receiving the State Pension.
Frequently Asked Questions
Is The State Pension Age Already Changing In 2026?
Yes. The phased increase from 66 to 67 started in April 2026 and is scheduled to be completed in spring 2028. The exact qualifying age during the transition depends on a person’s date of birth.
Who Is Most Affected By The State Pension Age Rise?
People who cannot remain in employment and have limited savings or private pension income can be particularly affected.
Those with health conditions, caring responsibilities or physically demanding jobs may find it harder to bridge the gap before State Pension eligibility.
Is The State Pension Age Going Up To 68 From 2037?
The OBR’s long-term projections assume a rise to 68 between 2037 and 2039. However, current legislation provides for the increase between 2044 and 2046, and the ongoing State Pension Age Review is considering the future timetable.
Could The State Pension Age Be Reduced To 65?
The Government currently says no. It responded to a parliamentary petition in October 2026 by stating that it has no plans to lower State Pension age to 65.
When Will The State Pension Age Review Be Completed?
The third State Pension Age Review must report by the end of March 2029. The Government says no final decisions on future changes arising from the review have yet been made.
How Much Could The Government Save By Increasing The State Pension Age?
The OBR estimated that the increase from 66 to 67 could reduce government borrowing by approximately £10.5 billion in 2029/30 compared with keeping the State Pension age at 66.