Key changes to the state pension are coming in right now yet many people may think the old rules are still in place. Claimants face a significant “gap” in their income if they misunderstand the new policy.
Money experts at savings account provider Raisin UK have raised concerns about people “caught in the transition” as the qualifying rules for the state pension are altered. The age when you can claim your state pension is gradually moving up, from 66 to 67.
Many think the old rules still apply
This changing is taking place in stages between April 2026 and April 2028, so it is important to check if you are due to start collecting your state pension soon. Kevin Mountford, personal finance expert and co-founder of Raisin UK, said: “Many people still think of 66 as the standard state pension age.
“The move from 66 to 67 is already being phased in, so some people will have to wait beyond their 66th birthday before they can claim. For those caught in the transition, their state pension age could be 66 years and a number of months, rather than simply 66 or 67.”
The state pension age has been 66 for both men and women since October 2020. So you could easily thing this access age would still apply to you, as this has been the rule for more than five years.
Check the rules
Mr Mountford urged people to check when they will become eligible for their payments. He said: “Anyone approaching retirement should therefore check their own state pension age rather than relying on what applied to a partner, friend or older relative. That matters because even a few extra months without the state pension can leave a gap that needs to be planned for.
“Someone who has assumed their state pension will start at 66 could find themselves needing to use savings or private pension income to cover several additional months.”
The full new state pension currently pays £241.30 a week, the equivalent of around £1,045 a month. So missing out on a few months’ worth of payments you were expecting to get could leave a sizeable shortfall in your income that you have to account for.
Winter is coming
State pension payments go up each April in line with the triple lock policy. This guarantees an increase in payment rates in line with whichever is the highest of three numbers.
Experts think the earnings number could be the deciding factor next year as well. But before next year’s pay rise kicks in, pensioners have to endure the high costs of the winter months.
Ofgem has confirmed the energy price cap will increase 4 per cent for the October to December period, with fears it could go up again in January. Mr Mountford shared some thoughts on how to get ready for the chilly months ahead.
He said: “One of the first things pensioners should check before winter is whether any cash savings are earning a competitive rate. With household costs still high, leaving money in a low-paying account can mean missing out on interest that could help offset some of those extra expenses.
“It is also sensible to keep an accessible cash buffer for higher winter bills, so you are not forced to dip into money set aside for longer-term priorities.”
