DWP state pension rule change warning for millions born between 1961 and 1977

A state pension rule change has been warned for state pensioners in their sixties – as the Department for Work and Pensions ( DWP ) plans to raise the age. The age is set to rise from 66 to 67 starting next year, the DWP has confirmed.

Then, a further increase from 67 to 68 is expected 2044 and 2046. It means that instead of reaching State Pension age on a specific date, individuals born between March 6, 1961, and April 5, 1977, will be eligible to claim the State Pension once they turn 67.

The age for both men and women will rise from 67 to 68 between 2044 and 2046, too. You don’t have to take your state pension as soon as you’re entitled to it, which is currently when you reach age 66 for both men and women.

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Martin Lewis, the BBC and ITV star, said: “Defer your state pension, and the maths works out that if you live longer than typical life expectancy, you’ll gain; if you live less, you’ll lose. Live a typical lifespan and it’ll be pretty neutral.

“So if you’re in poor health, it’s not really worth considering. If you’re in great health with a history of family longevity, deferring could be a winner.

“Otherwise the real issue is tax – if you’re earning or have a decent income now, but’ll pay tax at a lower rate later on, then deferring can be very worthwhile.”

For every 9 weeks you defer, you’ll get an extra 1%, which is around an extra £2.30 a week. If you defer for a full year, you get 5.8% extra, which is £13.35 a week, according to projections from Mr Lewis, the Money Saving Expert founder.

The 52-year-old has championed the need to defer state pensions from the DWP. As it stands, you don’t have to do anything to defer. The amount of State Pension you’ll get depends on how many ‘qualifying’ years of National Insurance payments you have. This includes National Insurance contributions that you pay when you are working and contributions that are credited to you when you are unable to work.