The State Pension Age (SPA) for everybody in the UK is currently 66, but a new report set for release this year could see the age increase, causing some concern for those eyeing retirement. In his Autumn statement, chancellor Jeremy Hunt announced there would be a review into the current age which would consider whether to quicken the already planned increases.
The SPA review will examine issues of cost and intergenerational fairness, with Work and Pensions Secretary Mel Stride suggesting last year the impact could become "pretty hairy", as reported by Leicestershire Live. Speaking to the Work and Pensions Committee, who pointed out that life expectancy is not rising, he said: "I think there are various moving parts in assessing where we should go with the SPA.
"One of them is life expectancy and more precisely, what proportion of your life should we expect people to have in retirement as opposed to not in retirement?"
SPA rises are already planned in coming decades, but may change depending on the DWP report due to be released in May 2023. Currently, in 2028 the planned SPA is 67, then between 2044-2046 it will be 68 years old, affecting those born on or after April 1977.
However, speaking to This Is Money, Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown, said: "Rumours suggest government wants to speed up the shift even more with a move to 68 potentially happening as early as 2032."
A previous review of the SPA in 2017, led by John Cridland, established that people should expect to spend on average up to one third of their adult life in retirement. So, with life expectancy stagnating, a quick increase in the State Pension Age would put a major dent in this.
Industry experts indicate the Government will have to give at least 10 years' notice before making any change to a SPA age of 68, so retirees approaching their State Pension date now will not be affected. Another planned increase by the Government will happen in 2028, meaning the minimum age for accessing a workplace pension or other private retirement savings goes from 55 to 57.
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