State Pension Age Rise to 67: What It Means for Care Planning and Fees
The state pension age in the UK is rising from 66 to 67, starting April 2026 and completing in March 2028. If you or a family member were born on or after 6 April 1960, you will be affected. The exact date you can claim your pension depends on your date of birth, and for some people, even a single day’s difference in birthday can push back their retirement by a full month.
This change is already in motion. If you are approaching retirement age, or are helping an older relative think about their future care needs, understanding how this affects your finances matters now.
What Has Changed and Who Is Affected
The rise from 66 to 67 is being phased in gradually across a two-year window. It does not happen overnight. Instead, eligibility shifts month by month based on your date of birth.
| Date of Birth | State Pension Age | Earliest Claim Date |
|---|---|---|
| On or before 5 April 1960 | 66 | Already eligible |
| 6 April to 5 May 1960 | 66 years, 1 month | 6 May 2026 |
| 6 May to 5 June 1960 | 66 years, 2 months | 6 July 2026 |
| 6 June to 5 July 1960 | 66 years, 3 months | 6 August 2026 |
| 6 July to 5 August 1960 | 66 years, 4 months | 6 November 2026 |
| Born on or after 6 March 1961 | 67 | From 2028 onwards |
The rise was legislated in 2014, so it is not a surprise move from government, but experts at Pensions UK warn that many people still do not realise it is happening. For anyone who planned to retire at 66, there could be an unexpected gap before their state pension starts.
The full new state pension from April 2026 is worth £241.30 per week, up from £230.25, following the triple lock mechanism which this year was anchored to earnings growth of 4.8%.
What Comes Next: The Rise to 68
This will not be the last change. Under current legislation, the state pension age is planned to rise again from 67 to 68 between 2044 and 2046. The Labour government has announced a pension review, and there is speculation this could be brought forward, though any change must come with at least 10 years’ notice.
For families now in their 50s who may be thinking ahead about their own care needs, or who are currently helping parents navigate later life decisions, the direction of travel is clear: the state pension will arrive later, and its role in funding retirement and care will need more careful planning.
How the State Pension Affects Care Home Fees
This is where pension changes connect directly to care funding. The state pension is not ring-fenced when you move into a care home. It is treated as income, and in most cases, it will contribute towards the cost of your care.
Here is how it works:
If the local authority is funding some or all of your care: Your state pension is included in the financial assessment (means test) as income. Most of it will go toward your care costs. You are allowed to keep a small amount for personal spending, known as the Personal Expenses Allowance (PEA), currently £30.65 per week in England.
If you are self-funding your care: You continue to receive your state pension in full. It remains part of your income and can help offset the cost of fees, which can range from around £700 to over £1,200 per week depending on the type and location of care.
If you receive NHS Continuing Healthcare: Care costs are covered in full and are not means-tested. However, in some circumstances you may still be asked to use your state pension toward care fees, subject to the same PEA protection.
For a deeper look at how different income sources are treated, see our guide to how moving into a care home affects your pension.
The Means Test: What Gets Counted
When a local authority carries out a financial assessment to determine how much you contribute to care costs, they look at:
- Savings and capital
- The value of your property (if you are moving into residential care and living alone)
- Income, including your state pension and any private pension
- Other benefits and allowances
The capital thresholds in England currently sit at £23,250 (upper limit) and £14,250 (lower limit). If your savings and assets are above the upper threshold, you are classed as a self-funder and pay the full cost of care yourself. Between the thresholds, costs are shared. Below the lower threshold, the local authority covers the majority of fees.
Your state pension income is included in the assessment regardless of which band you fall into.
Private pensions are treated slightly differently. If you have a private pension and your spouse or partner is still living at home, half of that pension can be passed to them and will not be counted in the means test.
For a full breakdown of how local authority funding works in the Nottinghamshire area, read our guide on paying for care homes in Mansfield.
Pension Changes and the Gap in Retirement Income
One of the less-discussed consequences of the state pension age rising is what experts are calling a “financial gap year.” If someone stops working at 66 but cannot claim their state pension until 66 and 4 months, for example, they face a period without that income. For people in poor health, or those who have already left work due to caring responsibilities or ill health, this gap can create real financial pressure.
This matters for care planning because:
- People in this gap period may need to draw on savings earlier than planned, which could affect their position in a future means test
- It may delay decisions about care that families had expected to fund partly through pension income
- For those who develop a health condition or care need during this gap, there may be limited income to meet initial costs before state pension starts
Understanding what support is available at each stage is essential. Our guide to who pays for elderly care sets out the main funding routes clearly.
How the Triple Lock Affects Care Planning
The triple lock guarantees that the state pension rises each year by whichever is highest: inflation, average earnings, or 2.5%. In April 2026, the increase was 4.8%, based on earnings growth.
For people already receiving the state pension and living in a care home, this is broadly positive. A higher weekly pension means a slightly higher contribution to care costs, but it also means the gap between pension income and care fees remains broadly stable.
For those who have not yet reached state pension age, the triple lock acts as a planning benchmark: it gives some confidence that pension income will retain purchasing power over time, which matters when you are estimating how much of your care costs the state pension might eventually cover.
Planning Ahead: Key Steps for Families
Whether you are approaching retirement age yourself, or helping an elderly parent think through their options, these are the most important steps to take now:
- Check your state pension forecast. The Government Gateway lets you see your projected state pension and your exact eligibility date. Do not assume it is still 66.
- Review any private pension provision. If you are self-funding care or likely to do so in the future, understanding your total retirement income picture is essential.
- Get a care needs assessment early. If care is likely to be needed in the next few years, a formal assessment by the local authority is the starting point for understanding what funding you might qualify for.
- Consider getting independent financial advice. A specialist care fees adviser (look for CF8 or CeLTCI qualifications) can help you plan how pension income, savings, and assets work together.
- Look at all available benefits. Attendance Allowance, Pension Credit, and NHS Continuing Healthcare are all worth investigating. Many people who are entitled to Pension Credit do not claim it.
For a broader view of your options, our guide to funding for nursing homes is a good starting point.
Frequently Asked Questions
Does my state pension stop when I move into a care home? No. Your state pension continues to be paid. If the local authority is funding your care, most of it will be used as a contribution toward your fees. You keep a small Personal Expenses Allowance for personal spending.
Will the state pension age rise affect my elderly parent who is already in a care home? No. If they are already receiving their state pension, nothing changes in terms of entitlement. The rise only affects when people can begin claiming, not those already receiving it.
What if I have not reached state pension age when I need care? If you move into a care home before state pension age, the local authority will not count your state pension income in the means test until you reach pension age. They may, however, look at the value of any private pension you hold.
Can the state pension cover care home fees? Not on its own. The full new state pension is worth around £12,547 per year. Care home fees typically range from £35,000 to over £60,000 per year. The state pension will contribute toward the total, but additional funding sources are almost always needed.
What is the Personal Expenses Allowance? This is the amount you are allowed to keep from your pension income each week, even if the local authority is paying for your care. In England it is currently £30.65 per week. It is intended to cover toiletries, clothing, and personal items.
Is there a cap on care costs in England? No. The social care fee cap that was planned under the previous government was scrapped by the Labour government. The means-test thresholds of £14,250 and £23,250 remain in place.
Talk to Lidder Care About Your Options
If you are thinking about care for yourself or a loved one, and want to understand how pensions and other income sources work alongside care fees, we are happy to talk it through.
Lidder Care operates two care homes in Mansfield: Newgate Lodge Care Home and Lowmoor Nursing Home. Both offer residential, nursing and dementia care, with experienced staff who understand the funding questions families face at this stage.
Call us on 01623 622 322 or visit our contact page to arrange a conversation or a tour.