A major DWP State Pension warning has been issued for millions of workers born between 1971 and 1973, as the UK government reviews plans to raise the State Pension age sooner than expected.
The Department for Work and Pensions is considering accelerating the rise in retirement age from 67 to 68, which could cost individuals thousands of pounds in lost benefits.
If implemented, the changes could strip affected individuals of a full year’s pension, worth up to £17,774, depending on future increase rates.
What’s Changing with the State Pension Age?
As of current legislation:
- State Pension age is scheduled to rise to 67 by April 2028
- It will further rise to 68 between 2044 and 2046
However, under the new DWP review, the rise to 68 could be brought forward to 2039, meaning that people aged 51 to 53 today—those born between 1971 and 1973—could face the brunt of the shift.
How Much Could You Lose?
New projections by wealth manager Rathbones suggest that bringing the pension age increase forward could cost individuals between £15,798 and £17,774, depending on how the pension continues to be uprated (e.g., by inflation or the triple lock system).
| Current Age | Years Until Age 67 | Loss (2% Inflation-Uprated Pension) | Loss (Triple Lock at 2.5%) |
|---|---|---|---|
| 51 | 16 | £15,798 | £17,774 |
| 52 | 15 | ~£15,400 (estimate) | ~£17,300 (estimate) |
| 53 | 14 | ~£15,000 (estimate) | ~£16,800 (estimate) |
These calculations assume a one-year delay in State Pension access, showing the financial hit individuals could take if the policy is fast-tracked.
Understanding the Triple Lock and Inflation-Based Increases
The State Pension is currently protected by the triple lock, ensuring it rises by the highest of:
- Average earnings
- Inflation
- 2.5%
Under this system, pension payments grow faster, meaning delaying access by a year causes greater losses compared to inflation-only increases. Hence, the urgency for those impacted to be informed and prepared.
Who Will Be Affected?
You may be affected by this pension age increase if:
- You were born between 6 April 1971 and 5 April 1973
- You are currently aged 51 to 53
- You were planning to retire at age 67 under current legislation
If the review outcome in 2029 recommends the change, you could be the first cohort required to wait an extra year before claiming your State Pension.
What You Can Do Now
While the DWP hasn’t finalized the change, it’s wise to:
- Review your private pension plans and retirement savings
- Track updates from the DWP or HM Treasury reports
- Consider financial planning advice to offset potential losses
Preparing now could help protect your financial future in case these changes are approved.
The DWP’s State Pension review could create significant financial impact for those born between 1971 and 1973.
If the State Pension age rises earlier than expected, affected individuals stand to lose nearly £18,000 in retirement income. With this potential pension bombshell, staying informed and financially prepared is more crucial than ever.
As the review report is due by 2029, workers in their early 50s today should begin considering alternative retirement planning strategies to secure their future.
FAQs
Who is affected by the proposed State Pension age change?
Anyone born between 1971 and 1973 may be affected if the DWP raises the State Pension age to 68 by 2039.
How much could be lost if the change is implemented early?
Individuals could lose between £15,798 and £17,774, depending on whether the pension is uprated by inflation or triple lock.
Is this change confirmed?
No, the change is under review and is expected to be finalized in 2029, but planning ahead is strongly advised.