State pension age warning as thousands delay retirement

The looming state pension age increase is causing thousands to delay their retirement. The imminent change in the state pension age by the HMRC is altering retirement plans, with people working longer than ever before, new data shows.

The average retirement age has hit a record high since data collection began. Men are now retiring at an average age of around 65, while women are retiring at about 64 years old, according to recent statistics - meaning at the moment, people born before 1959-60 are retiring later than ever.

Each year, hundreds of thousands of people retire, but the retirement age is set to rise to 67 between 2026 and 2028. Alistair McQueen, Aviva's head of saving and retirement, said: "The average age of exit from the labour market has hit a new high, since recent records began in 1984."

He further noted: "The average age of exit for a man has risen to 65.7, from 65.3 years. The average age of exit for women has risen to 64.5, to 64.1 last year. Our retirement age is often linked to the age at which we can access the state pension."

McQueen added: "The state pension age has risen over recent years, to 66, and this has encouraged older ages of retirement. In addition, since 2011, it has also been illegal to terminate someone's employment due to their age, and since 2015 savers have been given greater freedom in how they can access their pension savings."

He added: "These changes have supported a different approach to retirement. One of the most powerful levers we can pull to fund our longer lives in retirement is to work longer, with the potential for every extra year of work can add money to our retirement pot."

The amount you receive from State Pension payments depends on your National Insurance record, reports Birmingham Live. If you haven't reached State Pension age or did so on or after 6 April 2016 and are eligible, you could qualify for the new State Pension.

You need at least 10 qualifying years on your National Insurance record to be entitled to the new State Pension, but having a full 35-year record could make you eligible for the maximum payout. By the tax year 2024/2025, the new State Pension will increase to £221.20 a week.