New rules mean much more dramatic rises than had been expected

For many years the age at which you can claim your State pension benefits has been 65 for men and 60 for women. But the previous Labour Government set out plans, based on recommendations from Lord Turner, to steadily increase the State pension age to 68 for both men and women over the next four decades.


In May 2010, the new coalition Government initially signalled its intent to speed up the process, bringing forward the first rise to 66 for men from 2026 to 2016.

In the end, the Comprehensive Spending Review in October 2010 settled on a less radical option, confirming the rise to 66 for both men and women would come by 2020.

However, the Government said it will have to rise even higher in following years. This could see many Britons working today wait until age 68 or even 70 before they receive their State pension.

New rules For women, the new rules mean
much more dramatic rises than had been expected. The women’s State pension age will now move to 65 by 2018 and then increase to 66 (same as men) by 2020.

The previous Labour Government’s policy had been to raise the State pension age to 66 by 2026 and then incrementally to 68 by 2046. Retirement was due to equalise for men and women at 65 by 2020, rise to 66 between 2024 and 2026, 67 between 2034 and 2036, and 68 between 2044 and 2046.

Life expectancy
In the March 2011 Budget, the Government also revealed plans to link the State pension age to life expectancy in the future. If the pension age rose from now in line with the change in life expectancy over the past three decades (since 1981), someone born in 1970 could have to wait until age 71.

A fresh-faced twenty-something starting out in the world of work today could see their State pension age reach 75. And a seventeen-year-old A-Level student may not be able to retire until 2071 – when they’ll be 77. (All figures Standard Life estimates).

The pension age for both men and women will rise to 66 by 2020 – much sooner than the 2026 target set by Labour.

Decisions, decisions

When you reach the milestone of the State pension age, you essentially have three choices.
- Cease your working life and receive your State pension
- Continue to work and receive your State pension as well
- Carry on working and hold off claiming your State pension

When you do eventually decide to take your State pension, you can choose to receive either an extra State pension for the rest of your life, or receive a one-off, taxable lump-sum payment, equivalent to the benefits you put off claiming plus interest – as well as your regular weekly State pension.

In addition, you can also choose to stop claiming it after having claimed it for a period. And remember, if you carry on working after State pension age, you don’t have to carry on paying National Insurance contributions (NICs).