State pension age increase means people will lose £46,000 each
State pensioners are set to lose £46,000 each as the pension age increases. Another increase to the state pension age to 70 could lose retirees thousands of pounds each, it has been warned, amid the risk of the age being hiked to as high as 70.
Pensioners can start claiming the state pension benefit when they reach the age of 66, and this is expected to rise to 67 between 2026 and 2028. The state pension age is then set to rise to 68 between 2044 and 2046.
However, some experts have suggested the age would need to be raised to 70 before 2040 to prevent the system from collapsing. Rachel Lacey from interactive investor said: “Although previous governments have rejected recommendations from these reviews, calls are once again mounting to speed up the rate of increase.
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"The London School of Economics, for example, recently published a report recommending that the increase to 68 takes place as soon as possible. Similarly, the International Longevity Centre (ILC) has said that to maintain the existing ratio of workers to pensioners, the state pension age would need to reach 70 by 2040 – a rate of increase that is much faster than the current schedule.”
Under the triple lock, the state pension goes up by either the rate of inflation, average earnings or 2.5 per cent every year; whichever is higher. In April 2025, the benefit will rise by £460 a year, or four per cent, in line with the average wages.
The triple lock guarantees that the state pension will increase each year by the greater of 2.5 per cent, inflation and average wage growth. Reports suggest this costs the government around £10 billion a year. But the triple lock isn’t just expensive, it’s uncertain too, making it difficult for governments to plan.