State pension warning as millions of Brits face losing up to £18k

More than two million workers could lose nearly £18,000 if the Government increases the state pension age sooner, wealth management experts have warned. If Liz Kendall, the Work and Pensions Secretary, decides to accelerate the state pension age increase to 68, people aged 51 to 53 would be the worst hit, according to Rathbones, which manages older people's savings.

The current state pension age is set to increase to 68 by 2044, but Kendall is considering whether to bring this forward to 2039 as part of the pension review. If this happened, those aged 51 would lose an entire year of payments, which would be worth £17,774 if the triple-lock goes ahead.

Workers aged 52 would lose £17,340 in payments, while those aged 53 would miss out on £16,918. With around 800,000 people in each age bracket, this would impact around 2.4 million Brits.

Rebecca Williams from Rathbones warned that future generations may not receive the same benefits as current retirees.

She said: "With longevity increasing and population pressures mounting, future generations appear set to face a less generous state pension regime than that enjoyed by many of today's retirees.

"The situation appears particularly precarious for those in their early 50s who face the real prospect of missing out."

Experts have also warned that the triple lock, which promises to raise the state pension each year either in line with inflation, wage growth, or 2.5%-whichever is highest-will become unaffordable, and could push the age even higher.

The Institute for Fiscal Studies (IFS) warned that without a triple lock reform, state retirement age could rise to 69 by 2049, and to 74 by 2069, impacting those born in the 80s and 90s.

The Office for Budget Responsibility (OBR) said the triple lock is now projected to cost three times the original estimate by 2030 due to an ageing population, which would be £15.5billion annually.

Liz Kendall announced the Government pension review on Monday, July 21. When the review was announced, Rachel Reeves said it was "right" to assess state pension age so that it remains sustainable and affordable for future generations.

The current state pension retirement age of 66 is already set to rise to 67 between 2026 and 2028. An increase to 68 is also pencilled in for 2046.