Brits urged not to do one thing as millions face losing up to £18k of their state pension

Brits in their early 50s have been urged not to panic after research showed millions of people face losing up to £18,000 if the Government brings forward a rise in the state pension age. Wealth manager Rathbones has said raising the state pension age to 68 sooner than planned could hit people now aged 51, 52 and 53 first.

It found workers aged 51 would lose a year's worth of state pension payments if the rise comes sooner, amounting to £17,774. This assumes the current state pension amount rises in line with the triple lock each year. The triple lock sees the state pension rise by the highest out of inflation, average wages or 2.5% per year. The current state pension is about £12,000 for those who qualify for the full amount.

People aged 52 would lose £17,340 and those aged 53 would miss out on £16,918, according to Rathbones' research. About 2.4 million would be affected.

Scott Gallacher, Director at independent financial advisers Rowley Turton, told the Express the headline figure of £18,000 risked scaring people unnecessarily.

He said: "The actual shortfall for someone losing one year of state pension is around £12,000 in today’s money — and with 15 years to plan, that’s just £800 a year or £66 a month. Most people can close that gap with a bit of planning, not panic."

Mr Gallacher suggested many people in their early 50s may be on track already to retire at 67, with or without the state pension. But one tip the chartered financial planner suggested doing was to review your pensions and savings to see if you can boost returns, cut any charges or increase your contributions.

He added: "Yes, earlier state pension changes are frustrating. But this is manageable - especially if you start now."

Samuel Mather-Holgate, Independent Financial Adviser at Mather and Murray Financial, told the Express people should make sure they are members of their workplace's pension scheme.

He said: "Some people opt out, but that’s crazy. It’s like free money. It comes from your pre-tax salary and your employer often matches your contributions. If you can, contribute the maximum that your employer will match.

"Then speak to an adviser about what to do with your old pensions and whether to add more to them. They will complete a cash flow forecast to give you a clear idea about what you need and what you’ve got."

Benjamin Mitchell, Director at Headsup Wealth, told the Express the possibility of a state pension age rising sooner reinforced that the goalposts can be moved.

He said: "Workers in this age bracket (early 50s) should strongly consider alternative savings and investment vehicles such as ISAs and pensions to build up sufficient personal wealth to tide them over until state pension age.

"The state pension is not to be sniffed at and forms a crucial, guaranteed element of a retiree's income, but equally, individuals must take ownership to use tax-efficient wrappers such as ISAs and pensions to accumulate a sufficient level of wealth in their own name to bridge the gap."

Mr Mitchell added: "Private pensions can generally be accessed at 55 and ISAs can be drawn upon at any age, meaning these vehicles can help bridge the gap until your state pension kicks in."

The state pension age is currently 66. It is scheduled to increase to 67 between 2026-28 and then to 68 between 2044-46. Some have suggested the rise to 68 could be brought forward to between 2037-39.