Changes to State Pension age from today, July 6, mean more people will now have to wait until they reach 67 before they can retire.
Experts are warning the changes should serve as a wake-up call for anyone planning their retirement.
While the change does not affect everyone immediately, it is another step in the long-running increase to the State Pension age designed to reflect longer life expectancy and rising costs.
But retirement experts have warned there is another issue that many pensioners may not have considered.
With the full new State Pension continuing to rise under the triple lock while the personal income tax allowance remains frozen at £12,570, mean more people could soon find themselves paying tax on their pension income.
Derence Lee, Chief Finance Officer at Shepherds Friendly, said: "With the full new State Pension now sitting just below the frozen personal allowance of £12,570, more retirees are edging dangerously close to paying income tax on their State Pension."
He said today's changes highlight wider issues facing Britain's retirement system: "As the next phase of the State Pension age increase comes into effect, it also highlights a widening imbalance in the UK's retirement system.
"While the triple lock has played a vital role in helping pensioners keep pace with the high inflation seen in recent years, if the tax-free allowance remains frozen, some of the recent State Pension increases could effectively be taken back through income tax.
"For pensioners who rely mainly on their State Pension to cover everyday essentials, even a small tax bill could make a noticeable difference to their finances."
The warning comes as many households continue to face higher living costs, with retirees increasingly relying on a combination of State Pension payments and private savings to fund later life.
The expert said anyone approaching retirement should consider looking beyond the State Pension alone. He added: "By preparing today, pensioners give themselves the best chance to ensure their income keeps pace with costs and maintain a sense of financial stability."
Who is affected by the State Pension age change?
The latest increase affects people reaching retirement age under the government's phased timetable, with the State Pension age continuing to move towards 67.
People can check exactly when they will become eligible using the government's State Pension age checker.
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Why experts are urging people to review their retirement plans
Although the State Pension remains a key source of retirement income for millions, financial experts increasingly recommend building additional savings through:
- Workplace pensions
- Private pensions
- ISAs
- Other long-term investments
They also recommend checking eligibility for Pension Credit, which can increase income for lower-income pensioners and unlock extra support with bills, housing costs and council tax.
When will you get your State Pension?
The age at which you can claim your State Pension depends on when you were born. Here's the current timetable:
- Born 6 April 1960 to 5 May 1960: State Pension age is 66 years and 1 month
- Born 6 May 1960 to 5 June 1960: 66 years and 2 months
- Born 6 June 1960 to 5 July 1960: 66 years and 3 months
- Born 6 July 1960 to 5 August 1960: 66 years and 4 months
- Born 6 August 1960 to 5 September 1960: 66 years and 5 months
- Born 6 September 1960 to 5 October 1960: 66 years and 6 months
- Born 6 October 1960 to 5 November 1960: 66 years and 7 months
- Born 6 November 1960 to 5 December 1960: 66 years and 8 months
- Born 6 December 1960 to 5 January 1961: 66 years and 9 months
- Born 6 January 1961 to 5 February 1961: 66 years and 10 months
- Born 6 February 1961 to 5 March 1961: 66 years and 11 months
- Born 6 March 1961 to 5 April 1977: State Pension age is 67
People born between 6 July 1960 and 5 August 1960 are the latest group affected by today's change, meaning they will now reach State Pension age at 66 years and four months.
