Are you aware the state pension age is increasing next year?

This article sheds light on the important issue of people approaching their State Pension Age (SPA) and the awareness gaps that can lead to financial risks. As the State Pension age is set to increase from 66 to 67 in April 2026 for those born after April 1960, understanding one's SPA is critical for planning retirement and savings effectively.

Key points from the article include:

Awareness of SPA: A significant number of people approaching their SPA do not fully understand when it will occur. The study revealed that 22% of individuals (approximately one in five) either do not know their SPA or underestimate it, potentially leading to financial mis-planning. This issue is particularly acute for those with less financial security.

Groups at Risk: Certain groups—such as women, those with lower qualifications, the self-employed, and those not in paid work—are more likely to be unaware of or to underestimate their SPA. This can leave them vulnerable, as the state pension often represents a large portion of their income during retirement.

Improvement Over Time: The study found that as people get closer to their SPA, their knowledge improves. For example, those aged 60-65 were far more likely to accurately know their SPA compared to those in their late 50s. However, even by this age, a sizable minority of individuals still underestimate or are unaware of their SPA.

Importance for Financial Planning: Knowing one's SPA is crucial because it influences retirement decisions, including when to stop working and how to manage savings. With state pensions making up a significant part of most retirees' income, misunderstandings about the timing of receiving the pension could have serious consequences.

Recommendation: The article suggests that the government should provide clearer and earlier communication about SPA, particularly by notifying people around their 50th birthday, and guaranteeing no changes to the SPA for those within 10 years of reaching it. This would provide more certainty for people in planning their financial futures.

Ultimately, raising awareness of these upcoming increases and ensuring accurate information reaches the people who need it most could significantly improve retirement planning and reduce the risk of financial missteps.