Fears are growing that Chancellor Jeremy Hunt could unveil key changes to the state pension age is his Spring Budget.
The state pension age is already set to increase from the current 66 to 67 and then 68, with a report recently stating it could soon be hiked to 70 and beyond.
Chris Rudden, head of Investment Consultants UK at investment advice group Moneyfarm, told Express.co.uk: “There could be changes to the state pension and in particular an increase in the state pension age.
“This could be significant as the state pension forms a substantial portion of many people’s retirement income. It also plays a crucial role in bolstering individuals’ confidence in their ability to retire.
“The implication that individuals might not receive the state pension until their 70s could exacerbate existing distrust in the system.
“This could potentially lead to genuine concern and anxiety about their future and with a Government needing to encourage people to save for the long term, the focus needs to be on creating confidence in the sector not suspicion.”
Mr Rudden said experts have for many years pointed out that the state pension system is “deeply flawed” with concerns it could soon be scrapped altogether.
He said the policy is fast becoming a huge cost for Government coffers. The analyst said: “Research indicates that the projected cost of the state pension will soon exceed the combined budgets for defence, education, and the Home Office.
“The current model, tied to the triple lock, is likely to increase year-on-year. With significant issues facing the state pension individuals must prioritise private pension provision, starting early to benefit from many years of substantial market growth. Planning and self-reliance are crucial for a comfortable retirement.”
Accountant Chris Demetriou, from Archimedia Accounts, also said the Chancellor could set out changes to the state pension in the Budget, on March 6.
He told Express.co.uk: “The upcoming Spring Budget promises sweeping changes to Britain’s pension landscape. As a financial advisor, I am keeping a close eye on plans that could shape retirement security for generations.
“One policy with widespread implications is any increase in state pension eligibility ages. Extending careers can help fund longer lifespans but fails to consider varied life paths.
“Abrupt changes risk harming manual workers who lack flexible roles. Gradually raising the age while accounting for career length offers a fairer solution.”
The cost of the state pension will jump up from April, when payments increase 8.5 percent. This means the full basic state pension is going up from £156.20 a week to £169.50 a week while the full new state pension is increasing from £203.85 a week to £221.20 a week.
For the latest personal finance news, follow us on Twitter at @ExpressMoney_.
