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Will the State Pension age rise to 70 – or even higher?

How much income do you need in retirement

Written by Retirement Line Updated: 27th February 2024

There’s potentially worrying news for anyone in their 40s or younger. According to the latest research, the UK is among countries where the State Pension age may have to rise to 70 or higher by 2050.

The research by the International Longevity Centre (ILC) looked at indicators including life expectancy. This helped them assess what percentage of the population in future years will be aged 65 or older, compared to ‘work age’ people aged 15-65.

It is well known that many countries have rapidly ageing populations. But the startling news from this research is that in 20 countries, including the UK, by 2050 there will be one worker for every person over 65.

This creates the concern that tax from workers will not be enough to fund the State Pensions of retirees. According to the ILC, the UK State Pension age would need to be 70 or 71 by 2050 to maintain the current ratio of numbers of workers per pensioner.

Furthermore, researchers redefined the working adult population to begin from age 20 to account for time spent in full time education. They concluded that: “A State Pension age might need to hit age 70+ as early as 2040.”

The research looked at the effect of people being outside the labour market due to ill health. This places an extra strain on governments as it further reduces the tax income available to fund State Pension payments.

The ILC say: “Our research suggests a greater focus is needed on preventing ill-health not just in old age but from early age through adulthood. We know, for instance, that the longest health spans are in countries which spend most on prevention and adult immunisation.”

Responses to the research

Senior figures in the pensions arena reacted strongly to the report. They included former pensions minister Ros Altmann. Baroness Altmann said: “Raising the state pension age to 71 should be unconscionable. Only the top 10% of the UK population stay healthy into their early 70s, so cutting costs by making unwell workers wait longer, favours the well-pensioned, higher paid.”

Meanwhile, Jan Shortt of the National Pensioners Convention said: “These proposals will condemn even more people to a miserable retirement, as well as increasing pressure on already struggling public services.”

This isn’t the first time that an influential body has raised the issue of increasing the retirement age to around 70. Back in 2017 for example, BBC Business reported that the World Economic Forum was calling for an increase in countries including the UK, US, Japan and Canada. 

What are the government’s plans for the State Pension age?

The State Pension age is currently 66 for men and women. It is scheduled to begin increasing to 67 from 6 May 2026, affecting those born in or after April 1960. 

There are also plans for the State Pension age to rise again to 68 between 2044 and 2046, though this is not certain and the government could bring it forward.

Bridging the gap between retirement and State Pension

There is hope for those who seem scheduled for a push back of their State Pension age well into their late sixties or even their seventies. 

Many people will potentially be able to use income from their workplace or private pension to ‘bridge the gap’ between an earlier retirement and State Pension entitlement. This is thanks to a range of options for retirement income including annuities and drawdown, and the boost to pension savings seen since the introduction of auto-enrolment.

Mark Ormston, Retirement Line’s Director of Propositions and Corporate Partnerships is among those taking a keen interest in this subject, and spoke about it on the LBC radio station earlier this month. 

He says: “Talk of further increases to the State Pension age will understandably be a concern for people. But there are signs that future generations will be less reliant on the State Pension. 

“Many people choose to access their pension savings before State Pension age to either reduce their working hours or retire altogether and we could see this trend grow further. Auto enrolment seems to have reversed the decline in workplace pension saving, with millions more in a pension scheme compared to less than a decade ago.

“I am hopeful that government, employers and those of us in the pensions industry will continue to collaborate on further work to help people plan for a comfortable retirement. 

“It is especially important to remember that everyone’s circumstances will be different. Further thought will be needed to consider factors such as the growing gig economy and people who retire early due to ill-health.”

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