A review into the retiring age in the UK could mean people are forced to work for longer. The Department for Work and Pensions state pension age is already due to rise to 67 but there are fears it could be increased again to 68 - because people are living for longer.
The Government's current review of the State Pension age by the DWP started at the beginning of 2022 and will be completed by 2023. It is now considering whether the increase to age 68 should be brought forward to 2037-39 before putting forward any new legislation, LeicestershireLive reports.
The Pensions Act 2014 means the rules about pensionable age must be reviewed every six years to help to ensure the costs of increasing longevity are shared fairly between the generations. It also helps to provide greater clarity around how the state pension age will change in the future.
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A report by the Government states: "In 1948, when the modern State Pension was introduced, a 65-year-old could expect to live for a further 13½ years, or 23 per cent of their adult life, assuming adult life starts at 20. In 1995, when the first changes were enacted to equalise State Pension age, a 65-year-old could expect to live for 18½ years, or 29 per cent of their adult life.
"This had risen to around 21 years by 2007, or 32 per cent of their adult life, when further legislation was introduced to increase State Pension age."
The Government has estimated that increasing the pension age to 68 between 2037-39 would save £74 billion by 2045-46 compared to the current State Pension age timetable. The latest Office for National Statistics projections show the number of people over state pension age in the UK is expected to grow by a third to 16.9 million in 2042.
All of this has huge implications for public finances. Two increases to the state pension age are currently set out in legislation:
- A gradual rise to 67 for those born on or after April 5, 1960
- A gradual rise to 68 between 2044 and 2046 for those born on or after April 5, 1977
The first review of the state pension age was done in 2017 and concluded that the next review should consider whether the increase to age 68 should be brought forward to 2037-39.
The DWP said: “As the number of people over State Pension age increases, due to a growing population and people on average living longer, the government needs to make sure that decisions on how to manage its costs are robust, fair and transparent for taxpayers now and in the future. It must also ensure that as the population becomes older, the State Pension continues to provide the foundation for retirement planning and financial security.”
The Government has provided an online tool which gives an exact date for state pension qualification, just by entering your gender and date of birth.
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