Pensions in 2026: What you need to know about state pension age rise to 67, a

Fear that a cash-strapped government might come after pensions with new rules, caps and taxes is unlikely to let up in the coming year.

If the Chancellor doesn’t rule out new limits on 25 per cent tax-free cash, we could see a third damaging year in a row of panicked withdrawals from retirement pots.

This is Money ran many stories warning people against taking tax-free cash unnecessarily and based on pure speculation before the last Budget. 

The move is irreversible and you can miss out on investment growth under the tax protection of a pension in future. And tax free cash wasn’t touched in the end, as our retirement columnist Steve Webb predicted in advance to readers.

Rachel Reeves did clamp down on saving into salary sacrifice schemes to boost pension pots, though this will not start until 2029.

The Government is also forging on with plans to make pensions liable for inheritance tax, which is going to become a more pressing issue for affluent families in anticipation of the April 2027 start date.

People bringing forward lifetime spending or gifting has been another driver of pension withdrawals, but experts warn you should ensure you have enough to live on in retirement before doing so.

We delve into these and other big issues facing pension savers and retirees below. Here’s what you need to know in 2026.

Pensions will be drawn into the inheritance tax net from April 2027, and families are already planning ahead to avoid the levy

1. State pension age: New pensioners will have to wait beyond 66

Starting in April, the state pension age will begin rising from the current 66 in a phased process that will make it 67 for everyone from April 2028. 

If your 66th birthday is pending, see the timetable below.

The next age increase is also officially up for debate, after the Government launched two new studies – which it is required to do by law every six years – that will look at when to hike to 68.

The Government has effectively, if not in so many words, told the experts working on the reports to operate under the assumption that the triple lock pledge will remain in place indefinitely.

This means that the state pension increases every year by the highest of inflation, average earnings growth or 2.5 per cent. 

The Government has promised to stick to the triple lock for the whole of this parliament.

The trade-offs between the state pension age and annual increases are likely to come under greater scrutiny .

Experts say the triple lock tends to benefit better off elderly people who live longer, while raising the state pension age to help fund the higher annual rises disproportionately affects poorer pensioners who have lower life expectancy.

Meanwhile, the minimum age to access work and other private pensions is also scheduled to go up, from 55 to 57, but not until April 2028.

2. State pension increase: Row is brewing over new tax waiver

The Government’s idea to let pensioners off paying income tax if their only income is the state pension is proving controversial.

It’s only in the planning stage so far, but if implemented it could drive a wedge between pensioners who are exempt and those still expected to stump up tax.

The annual full rate new state pension for those retiring since 2016 will increase to £12,548 a year from next April.

That just nudges the threshold where people start being stung for income tax, which is £12,570 and is set to be frozen until at least 2030/31.

This puts the Government in a bind, because if…