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How will the proposed increase in pension age affect you and your clients?


On Wednesday, the Government announced that the state retirement age would increase from 67 to 68 in 2037. This change will affect millions of workers, who will now potentially have to work for an additional year before receiving the state pension.

Prior to this announcement, the state pension was intended to increase from age 67 to 68 between 2044 and 2046. However, the Department for Work and Pensions have blamed the ever increasing cost of paying the state pension as the rationale behind moving the dates forward by seven years.

Who will this affect?

It is estimated that six million people aged between 39 and 47 will now have to wait longer than previously expected in order to receive their state pension. The current state pension age of 65 for men and 64 for women has already been through previous legislation and has seen changes to the retirement age. This is how it will look to those affected:

Date of Birth                                        State Pension

After 6 April 1978                                  68 years

6 April 1970 to 5 April 1978                    67 years 1 month to 68 years*

6 April 1960 to 5 April 1970                    66 years 1 month to 67 years*

6 December 1953 to 5 April 1960            65 years 1 month to 66 years*

*subject to your exact date of birth


The current state pension, for people who retired after 2 April 2017, is £159.55 per week (£8,296.60 per year). We have calculated that in order to privately purchase an annuity that would provide the same benefits of the state pension, it could cost between £250,000 and £300,000 (subject to health and other factors).

The state pension also benefits from what is known as the “triple lock”. This was introduced back in 2010 and was a guarantee to increase the state pension every year by the higher of inflation, average earnings or a minimum of 2.5%. It is no surprise that this is also under review by the Government.

Although the announcement was a sign of the Government’s intentions, it will still need to be voted into law.

It is thought that one of the biggest factors driving of the proposed changes is the fact that people are now living longer and as such, there is a bigger cost to the state budget.

How are personal injury and clinical negligence claimants affected?

Adroit has extensive experience in the calculation of pension loss, analysis of Periodical Payment Orders and independent financial advice, and has considered how this will affect injured claimants.

Periodical Payments: The fact that people are living longer illustrates the importance of considering periodical payments when looking at your clients’ damages given that, like the state pension, periodical payments are made throughout a claimant’s life, however long that may be.

Investments and Cash Flow Modeling: We should be mindful when we cash flow model our clients’ income and expenditure, that there is an extra year when the clients are without this income.

Loss of Earnings: This also means that it should, by definition, mean an additional year for the lost earnings claim.

Pension Loss: A further impact on the proposed increase in retirement age is that, where relevant, a thorough and detailed analysis of a client’s pension loss should be undertaken and included in their claim.

For a consultation please contact our experts online or on 0800 884 0006 for financial advice.

Neil Brownhill, Financial Consultant at Adroit Financial Planning.