Retirement age increases in the UK have been accelerating in the past few years – but some countries have to wait even longer to cash in fully on their pensions.
In the UK, the retirement age is defined by the state pension age, which is the earliest age a person can start receiving the state pension.
This is a regular payment made by the Government depending on how many ‘qualifying years’ of National Insurance contributions a person has.
From October 2020, the state pension age in the UK for both men and women rose to 66.
However, this is set to gradually increase again to 67 for both men and women from May 6, 2026, in a move that the Government says aligns with the country’s ageing population.
From 2044, the state pension age is expected to rise to 68 in the UK.
While the announcement last March sparked widespread criticism, there are a few other countries where the retirement age is even higher, albeit marginally.
Among the countries with the highest retirement age in the world at 67 for men and women is Greece.
To qualify for full pension benefits, workers must have contributed to the pension plan for a minimum of 15 years, equivalent to 4,500 working days.
Joining Greece are Denmark, Iceland, Israel, Italy, and the Netherlands, which also each have retirement ages of 67. People must now also be 67 to receive the Age Pension in Australia.
Experts have said the retirement age in the UK may soon have to rise to 71 in order to save the funding of the state pension, as well as the rising life expectancy in the country.
The report from the International Longevity Centre was released in February. It suggests that if the UK’s working population is defined as individuals aged 20 to 64, accounting for the time spent by young people in full-time education, the state pension age may need to rise to 70 and beyond by 2040.
Commenting on the report, Lily Megson, policy director at My Pension Expert, said: “Entering your seventies with retirement but a blip on the horizon is a sobering thought for many – yet a very tangible reality that millions will face in years to come.
“After decades with their noses to the grindstone, don’t Britons deserve more support and appreciation? Although this may feel disheartening to many, it needn’t crush people’s dreams of a comfortable retirement beginning at whatever date they see fit.
“Diligent financial planning can make this possible – in other words, taking stock of pension products and investments, and engaging with independent financial advice to create a robust retirement plan where necessary.
“Where the Government must intervene is facilitating this support and providing the necessary tools to help make this happen for Britons.”
However, according to PensionBee’s latest Pension Confidence Index, Britons feel more positive than negative about their retirement prospects, for the first time in six months.
Positive pension sentiment has surged in the last three months, with the Pension Confidence Indicator soaring to +22 in March 2024. This marks a notable increase from -10 in December 2023 and -9 in September 2023.
This shift can be attributed to a significant decrease in negativity among those under the age of 55 and a further increase in confidence among those at and near retirement age.
The top reasons for feeling positive among the under 55s were: ‘My employer contributions are relatively good’ (41 percent); ‘My personal contributions are relatively good’ (38 percent) and ‘My fund performance is good’ (21 percent).
The top reasons for feeling negative amongst this age group were: ‘I can’t afford to contribute enough’ (34 percent); ‘I think my pension pot is small’ (34 percent) and ‘I’m worried that my costs will be high in retirement’ (26 percent).
For the over 55s, the top reasons for feeling positive were: ‘I am entitled to the state pension (60 percent); ‘I have a good Defined Benefit pension’ (21 percent) and ‘I am already enjoying a comfortable retirement’ (21 percent).
Meanwhile, the top reasons for feeling negative amongst this age group were: ‘I wish I’d saved more’ (27 percent); ‘None’ (23 percent) and ‘I’m worried about inflation’ (28 percent).
Becky O’Connor, director of public affairs at PensionBee, commented: “It’s encouraging to see a growing sense of pension optimism in the UK, suggesting factors such as falling inflation rates and reduced cost of living pressures, in addition to a recovery in stock market fortunes and the State Pension increase, have played an important role in bolstering confidence.
“While it’s often assumed that younger individuals feel more confident when it comes to their pension, due to having a longer period to save, this research highlights a nuanced reality.
“Initial zeal for pension savings can give way to competing financial demands during the middle of one’s career. It appears for many, it’s the proximity to retirement and the attainment of financial clarity that reignites this pension confidence later in life.
“However, it’s crucial to acknowledge the persistence of the gender gap in pension confidence.
“These dynamics highlight the multifaceted nature of pension confidence, underscoring the importance of financial planning for all individuals across all stages of life.”
