The state pension age is currently 66 for men and women and is already scheduled to rise to 67 between 2026 and 2028
The state pension age could rise to 70, it is feared, ahead of a major review into whether future increases should be linked to life expectancy.
The state pension age is currently 66 for men and women and is already scheduled to rise to 67 between 2026 and 2028. A further increase to 68 is due to happen between 2044 and 2046.
There previously have been calls for this to be brought forward but no decision has been made yet. This week saw Work and Pensions Secretary Liz Kendall commission the next review into the state pension age.
Dr Suzy Morrissey will lead the review and will examine the “merits” of automatic increases to the retirement age, and will look at how other countries. Denmark recently confirmed its pension age is rising to 70 by 2040, in line with life expectancy.
The average man aged 66 in 2025 is projected to live a further 19.2 years. This then increases to 21.1 years by 2050. For women, the figures are 21.8 years in 2025 and 23.7 years in 2050.
Dr Morrissey said: “Most of us will expect to receive at least some state pension once we reach state pension age. I have been asked to make recommendations on a framework that the secretary of state can use when considering future state pension age arrangements, in light of the long-term demographic pressures the country faces.”
Sir Steve Webb, a former pensions minister, said: “Having a completely automatic formula to move from changes in life expectancy to changes in state pension age could cause chaos for people’s financial planning.
“Every time the population projections are updated, this could move the dates for pension age changes by up to a decade, which would make it impossible for people to plan for their retirement finances.
“Having a rigid rule for setting pension ages creates more volatility and uncertainty than an approach which is more based on judgment and taking into account a wider range of factors.”
The state pension rises every year in line with the triple lock. The triple lock ensures the state pension rises every April in line with either inflation, wage increases or 2.5% – whichever is the highest.
The Office for Budget Responsibility (OBR) recently warned the annual cost of the triple lock policy is estimated to reach £15.5billion by 2030. There are two different types of state pension and which one you claim depends on when you were born.
You claim the new state pension if you’re a man born on or after April 6, 1951, or if you’re a woman born on or after April 6, 1953. The full new state pension is worth £230.25 a week.
You claim the older basic state pension if you’re a man born before April 6, 1951, or a woman born before April 6, 1953. The full basic state pension is worth £176.45 a week.