Big changes are on the horizon for those expecting payments from the state pension or a private pension in 2026. The state pension, funded by the Government and calculated based on National Insurance contributions, will see an increase next year. Private pensions, which individuals build through their own contributions, are typically set up through workplace schemes or personal arrangements.
In 2026, the state pension is set to rise by 4.8%, in line with wage growth. This increase will push the full new state pension from £230.25 to £241.30 per week, while the old basic state pension will climb from £176.45 to £184.90 weekly.
Currently, the state pension age for both men and women is 66, but it will gradually rise to 67 between 2026 and 2028. Those born on April 6, 1960, will be the first affected by this change, delaying their state pension collection until they reach 66 and one month. This increment will continue until individuals born on March 6, 1961, who will have a state pension age of 67.
Subsequently, the state pension age will be 67 for all future retirees, with a further increase to 68 scheduled between 2044 and 2046. The pensions dashboard, an online tool aimed at consolidating pension information for easier tracking, is expected to connect around 3,000 providers and schemes by October 31, 2026.
The Pension Schemes Bill, anticipated to become law in mid-2026, will introduce changes gradually, including the consolidation of small pension pots under £1,000. The Department for Work and Pensions (DWP) highlights that holding multiple small pots can hinder savers from maximizing their retirement funds due to multiple charges.
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