Today the landscape is very different. In 2018 we had the equalisation of the SPA for men and women at 65. Current legislation raises SPA to 67 between 2026 and 2028 and to 68 between 2044 and 2046 for both men and women.
The government’s third statutory review of SPA, launched in August 2025, has re-ignited debate on whether the timetable should change again, with a rise to age 70 under active consideration.
Historically, DB schemes often integrated tightly with the State Pension. Many had a Normal Pension Age (NPA) of 65 for men and 60 for women and some included deductions to reflect the old basic state pension. That integration has now broken down. As SPA increases, members may face a widening gap between the point they can draw their DB pension and when the State Pension becomes payable.
Trustees therefore face a pressing fiduciary duty: to help members navigate this transition, avoid sudden drops in income and ensure greater retirement security.
The Emerging Gap
The gap between scheme pension entitlement and State Pension entitlement is already affecting members and will intensify if SPA rises further. Individuals retiring in their early 60s could face several years of reduced income before the State Pension begins. For those unable to keep working due to health or caring responsibilities, the risk of hardship is real.
This issue is not abstract. The campaign by Women Against State Pension Inequality (WASPI) has highlighted the consequences when SPA increases come as a surprise. Many women born in the 1950s felt they had little notice of changes and faced unexpected financial gaps. The lesson for trustees is clear: transparency and early communication are essential.
While trustees cannot change government policy, they can support members by strengthening communication, offering flexible retirement options and using scheme funding creatively where permitted.
Step 1: Enhance Member Communication and Education
The first priority is ensuring members understand how SPA changes affect them. Many are still unaware of the timetable and without guidance they risk poor decisions.
- Proactive messaging: Go beyond generic benefit statements. Send targeted communications to members approaching retirement, explaining how rising SPA creates a gap with the scheme’s NPA.
- Segment audiences: Tailor communications for deferred members, those within five years of retirement and current pensioners. Each group faces distinct issues.
- Provide clear resources: Scheme websites should host calculators projecting income at different ages and links to the government’s State Pension forecast service, which highlights any National Insurance gaps.
- Promote informed choices: Remind members how tax-free cash can be used to help bridge income gaps, alongside the trade-offs.
- Low-cost options: Even small schemes can signpost free resources such as MoneyHelper (formerly the Money & Pensions Service) and use short videos or webinars to reach members without incurring heavy costs.
- Information sessions: In partnership with employers, workshops or online sessions can explain SPA changes and allow members to ask questions.
By investing in smarter communications, trustees can equip members with the knowledge needed to plan effectively and avoid financial shocks.
Step 2: Provide Flexible Retirement Options
For many, the solution is not to delay retirement but to reshape income until SPA. Trustees can help through flexible benefit design.
- Bridging pensions: Allow members to take a higher pension between their retirement date and SPA, then reduce benefits once the State Pension begins. This produces a more level income. Clear actuarial modelling is vital.
- Phased retirement: Where permitted, members can reduce working hours while drawing part of their pension, easing the shift into retirement and supporting workforce planning for employers.
- Interaction with DC: Many members hold DC savings, AVCs or other contributions. DB options should be explained alongside DC choices, such as insurer fixed-term annuities that can provide temporary income until SPA.
- Review outdated rules: Some schemes still prevent members from drawing a pension while working, either for the sponsoring employer or elsewhere. These restrictions are increasingly out of step with modern retirement. Trustees should work with employers and advisers to amend rules and enable flexibility.
Offering such options requires clear communication and robust governance but can significantly improve outcomes.
Step 3: Leverage Scheme Funding for Member Benefit
The funding position of many DB schemes has improved in recent years, with some now in surplus. This opens opportunities to support members more directly.
- Use of surpluses: Recent reforms give trustees more flexibility. Subject to funding levels and employer agreement, surplus could support discretionary benefit improvements or subsidise bridging pensions. These decisions must balance employer and member interests.
- Improve dependants’ benefits: Many legacy schemes still provide only a 50% spouse’s pension. Increasing this to two-thirds (67%) would strengthen protection for surviving partners and make practical use of surplus.
- Risk transfer considerations: For schemes approaching buy-in or buyout, trustees should ensure member needs are factored into negotiations. While the primary aim is security, there may be scope to enhance terms or design options that ease the SPA gap before transfer to an insurer.
- Efficient administration: Flexible options such as bridging pensions and phased retirements require systems that can produce clear figures promptly. Strong administration enhances member experience and reduces costs.
- Seek professional advice: Legal and actuarial expertise ensures any adjustments are compliant, well-designed and clearly explained.
By making careful use of strong funding positions, trustees can deliver tangible value at a time when rising SPA is eroding certainty.
Conclusion
The steady rise in SPA, with the possibility of an eventual move to 70, underscores the disconnect between legacy DB scheme structures and today’s state system. For members, this creates the risk of a serious income gap in their mid-60s, just as their ability or desire to work may be declining. The WASPI campaign showed the impact of poor communication and insufficient support during similar transitions.
Trustees cannot influence national policy, but they can take meaningful action: enhance communications using accessible tools, offer flexible retirement options that interact with members’ DC savings and use scheme funding thoughtfully, including improvements to spouse’s pensions.
By doing so, trustees go beyond fiduciary duty, demonstrating a commitment to supporting members through a difficult transition. Ultimately, helping members navigate the disconnect between DB schemes and State Pension provision protects both the legacy of the scheme and the dignity of retirement.
Ray Hughes, Director & Consulting Actuary – Hughes Price Walker
