Just as we’re settling into the 2025/26 tax year, the retirement headlines are heating up again. Government chatter about raising the State Pension age to 68, sooner than planned, has sparked fresh anxiety, especially for those born in the late 1960s and early 1970s.
And understandably so, because if the rules shift, and access gets pushed back even a few years, your income plan could be left with a gap. But here’s the reality check: your retirement isn’t locked to Westminster’s timeline. You have options, time, and a solid Plan B could make all the difference.
What the Numbers Mean In Reality
The full new State Pension is now £230.25 per week (2025/26), following a 4.1% increase under the triple lock. Delay it, and it increases by 1% for every 9 weeks deferred, equivalent to around 5.8% extra per year.
The twist? If the age moves to 68 sooner, you could face an unexpected income gap, right when you’d hoped to slow down. And for those planning to ease into retirement at 65 or 66, that could mean a sizeable funding shortfall unless you’ve got a backup plan in place.
This isn’t about doom and gloom. It’s about taking control of what you can control and not leaving your retirement up to chance.
Smart Moves If You’re 5–15 Years from Retiring
Here’s where “Plan B” kicks in. If you’re in your 50s or early 60s, you still have options, and they don’t need to be complicated.
- Split Your Strategy
Relying solely on the State Pension or even one private pension can leave you exposed. Instead, think in layers:
- Pensions (defined benefit or defined contribution)
- ISAs (tax-free withdrawals, flexible timing)
- General investment accounts
- Cash buffers
Each has its role. The goal? To give you income options before the State Pension kicks in.
- Build a Pension Buffer
Now’s the time to revisit your workplace and personal pensions. Are you maxing your contributions? Could salary sacrifice help you save more tax-efficiently?
The annual allowance is now £60,000 (unless tapering applies), and every pound counts, especially if the State Pension gets pushed out by several years.
- Know Your Numbers
How big is the gap between when you want to retire and when the State Pension might realistically arrive? Could you cover that difference for 2–5 years without stretching?
A simple cashflow plan can show whether your finances are ready, or if there’s a shortfall you need to patch.
- Watch for Opportunities
If you’ve paid off your mortgage or seen your children become financially independent, now could be a great window to ramp up savings.
Think of it as your “catch-up” decade, where the right planning now could pay serious dividends later.
What If You’re Closer Than You Thought?
For those within five years of retiring, a delay in State Pension age can feel like a gut punch. But that doesn’t mean you’re out of options.
If you’ve built up a decent pension pot, it might be possible to draw down gradually while waiting for the State Pension. However, this needs to be done carefully to avoid triggering the MPAA or unnecessary tax.
If you start drawing taxable income from a pension, watch out for the Money Purchase Annual Allowance (MPAA), which restricts future pension contributions to £10,000 a year.
Alternatively, some clients explore part-time work, downsizing, or even tapping into ISA reserves for a few years. The key? Having the flexibility built in.
Final Advice: Build It Before You Need It
Whatever the government decides, the safest position to be in is one where you’re not dependent on the State Pension for your earliest retirement years. It should support your lifestyle, not define it.
Need help figuring out what your Plan B looks like?
📞 Call us on 020 8366 4400
📧 Or email enquiries@cedarhfs.co.uk to start your review.
Capital at risk. Tax treatment depends on individual circumstances and may change in future. This article is for general information only and does not constitute personal advice.