Will The State Pension Be Scrapped in the UK

The State Pension is a regular payment that most people can claim from the government when they hit a certain age (called the State Pension age).

Your State Pension age depends on when you were born and the system is a little bit complicated.

For most people the State Pension age is 66, however, this is due to 67 between 2026-2028 and is likely to increase again in the future.

For an accurate estimate, check your State Pension age on GOV.UK.

To qualify for the State Pension, you’ll need to make National Insurance (NI) contributions for a certain number of years called “qualifying years.”

You normally need at least:

• 10 qualifying years for the minimum State Pension
• 35 qualifying years for the full State Pension

NI contributions can be made up of tax taken from your income, National Insurance credits, self-employment and voluntary contributions.

How is the State Pension amount calculated?

Currently, the amount of State Pension you receive is decided by the ‘triple-lock’ mechanism.

This means that most State Pension payments increase each year by the highest of the following:

• average earnings growth
• inflation
• 2.5%

There are a couple of exceptions, including the ‘Additional State Pension’ (which is part of the old State Pension system before 6 April 2016), that increase by CPI inflation.

How is the State Pension funded?
The State Pension is funded by the NI contributions which come out of your income.

The system essentially means that each working generation pays for the older generation through retirement.

It’s important to note that your NI contributions also fund the NHS and benefits such as universal credit.

The State Pension has come under scrutiny with many asking how sustainable it will be to fund in the future.

The biggest challenge affecting the State Pension is its cost. Currently, the State Pension is the UK’s second-largest expense in the government budget behind the NHS.

And this cost is set to rise, according to government data.

The Department for Work and Pensions (DWP) estimates that total expenditure on the State Pension in 2025-26 will be £146 billion.

Accounting for inflation, that means total spend on the State Pension has increased by 19% over the past 10 years and 70% over the past 20 years.

Data from the Office for Budget Responsibility (OBR) shows that in the mid-20th century the State Pension was around 2% of GDP, which has increased to around 5% of GDP, costing £140bn.

The OBR estimates that the State Pension will eventually rise to around 7.7% of UK GDP by the early 2070s.

The government is unlikely to scrap the State Pension entirely due to the fundamental role it plays in many people’s retirement income.

There were an estimated 12.95 million State Pension claimants recorded in Great Britain in 2024/25.

However, changes could be made to how the State Pension operates to make it more sustainable financially in the long term.

Some of these changes include:

Increasing the State Pension age
An improvement in life expectancy has led to the State Pension age rising over time. That’s because the State Pension becomes more expensive if people are claiming it for longer.

Increasing the State Pension age limits the number of people eligible for the benefit and potentially reduces the number of years it needs to be paid during a person’s retirement.

Initially, it was 60 for women and 65 for men. From 2010, the State Pension age gradually increased for women so that it matched 65 by 2018.

Once the State Pension age was equal for both men and women, it rose again to 66 by October 2020.

Currently, the State Pension age is due to rise to 67 between 2026-2028 and is likely to increase again in the future.

The government recently held a consultation to review the State Pension age

Axing the triple lock
The State Pension triple lock has been under scrutiny in recent years. The mechanism, which was introduced in April 2011, means that the State Pension goes up with the highest of:

• inflation
• average earnings growth
• 2.5%

Since inflation and average earnings growth are difficult to predict, it’s challenging to forecast exactly how much the State Pension will cost. And manage it sustainably over the long term.

While the government has not expressed any intentions of changing the triple lock, we could see a standardised rate introduced for State Pension payment increases in the future.

Introduce means-testing
The State Pension isn’t a means-tested benefit. So your income and personal circumstances don’t disqualify you from receiving the payment. (You’ll just need to make sure you have enough qualifying years to get it. )

Similarly to raising the State Pension age, introducing means testing could limit the amount of people that qualify for the State Pension. And potentially lower the cost of providing the benefit for retired workers.

Check out our podcast episode The Pension Crisis You Can’t Ignore with Dr Priya Khambhaita for more insights.

1) Work out how much you need
The best way to save for a comfortable retirement is to work out how much you’ll need to cover your expenses and lifestyle.

This gives you a clear target to work towards and guide how well your pension savings match up over the years.

Using a pension calculator can help estimate how much pension income you’re likely to have when you retire.

Keep in mind when making your estimates that today’s price is not yesterday’s price.

The cost of living is ever-increasing, which means that the price of goods and services today will likely increase by the time you retire.

2) Check your State Pension forecast
It’s important to check your State Pension forecast to get an idea of how much State Pension you’re on track to get.

And help you build a more detailed picture of how much income you’ll have when you retire.

Your forecast will show you:

• how much State Pension you could get
• when you can start getting the State Pension
• if you can increase your State Pension amount
• how you can increase your State Pension

You can check your State Pension forecast on GOV.UK or via the HMRC app.

3) Top up your National Insurance contributions

To qualify for the State Pension, you’ll also need to have paid at least 10 years of National Insurance (NI) contributions.

If you have missing NI contributions in a qualifying year, it won’t count towards your State Pension. However, you can make voluntary NI contributions to fill any gaps.

4) Claim National Insurance credits
If you need to take time out of work to care for a child, an adult or due to illness, you might be able to claim National Insurance credits to help you qualify for the State Pension.

National Insurance credits help build up the number of qualifying years you have which could help you increase how much State Pension you qualify for.

5) Monitor your pension performance

It’s important to monitor how your workplace pension, personal pension or self-invested personal pension (SIPP) is performing.

This helps you get an idea about whether your pension performance is on the right track.

Generally speaking, you should aim to check your pension at least once a year. You can do this by logging into your account on the pension provider’s website.

This will let you know the name of the fund your pension is invested in and how much it has grown by.

Once you have these details, you can use our pension performance checker to compare how well your pension is doing and whether you could get better returns using another provider.

6) Track down lost pensions
Around £31 billion is sitting in unclaimed pension pots in the UK. But tracking yours down might be simpler than you think!

If you’ve lost touch with a pension, you can track it down using our free Pension Finding Service in partnership with Gretel.

It only takes a few minutes to register and start finding yours.

You can also use the Pension Tracing Service online at GOV.UK, via telephone or post.

7) Consider expert financial advice
Pensions can get a little bit complicated, especially with the rules and allowances changing over time.

Speaking with a specialist financial or pensions adviser could help you get a clearer picture of what type of retirement you’re on track for.

Your adviser can also help you come up with a plan to ensure you have enough money to fund the lifestyle you want by the time you want to retire.