The future of the state pension has been called into question after an “alarming” new report published today (5 February) revealed the retirement age for UK workers may need to rise to 71 by 2050.
The report, from the International Longevity Centre, has been met with concern by the financial services sector – with pensions experts describing it as “sobering”.
The current UK pension age of 66 is expected to rise to 67 between May 2026 and March 2028 and then to 68 from 2044.
However, the latest findings suggest even this may still not be enough, and that anyone born after April 1970 may have to work past 70 before claiming their pension.
My Pension Expert policy director Lily Megson said: “Entering your seventies with retirement but a blip on the horizon is a sobering thought for many – yet a very tangible reality that millions will face in years to come.
“After decades with their noses to the grindstone, don’t Britons deserve more support and appreciation?”
She said that although this may feel disheartening to many, “it needn’t crush people’s dreams of a comfortable retirement beginning at whatever date they see fit”.
Megson added that this can be achieved through “diligent financial planning”, such as taking stock of pension products and investments, and speaking to a financial adviser.
In response to the report, Aegon has made fresh calls on the UK’s political parties to detail their plans over the future of the state pension.
Aegon head of pensions Kate Smith said: “We know from our Second 50 research that over 95% of us expect to depend on the state pension in later life – so this report will be concerning for millions of people.
“Pushing back the state pension age to age 71 would be a shock for many – when they are expecting to receive this from age 67 or 68. Some will only receive it for a short time, others not at all.
“This report, published in an election year, highlights the need for the political parties to detail their plans for state pensions ahead of the UK general election.
“This is too important an issue to be kicked into the long grass. People need to know where they stand and what this means for their later life, giving them plenty of time to adjust their working and savings plans.
“Raising the state pension age feels a like very blunt instrument – and would likely penalise those most in need.
“This report from the International Longevity Centre shows that we all collectively and individually would benefit from looking more closely at the uncharted territory of later life.
PensionBee director of public affairs Becky O’Connor said: “Such a dramatic increase to the state pension age from the current age of 66 to possibly as high as 71 is quite an alarming prospect.
“People depend on the State Pension for a significant chunk of their retirement income. It’s also key to confidence in people’s ability to retire at all.
“Even the suggestion that people won’t get it until their 70s will make people feel more distrustful than they already are in the state pension system and may cause actual worry and anxiety about their future.
“If people suffer ill health or face the need to care before 71, as is likely for many, they may have to give up work sooner than they can receive their state pension anyway and have to claim working-age benefits for longer instead.
“While the sustainability of the state pension needs to be properly examined, increasing the age people get it may not turn out to be the cost saving a government would hope for.”
PensionBee research has found that nearly half (48%) of UK savers believe they won’t be able to retire before the state pension age if and when it is raised to 68, as projected between 2044-2046.
O’Connor added: “Given these findings, it’s reasonable to anticipate even more people would be forced to work for longer if the state pension age rises to 71 by 2050, as suggested by the International Longevity Centre.
“Our research also indicated that the perceived ideal retirement age is 60 – over a decade earlier.
“The growing disparity between this preferred retirement age and an increasing State Pension age would mean people would have to save even more through private pensions if they wanted to retire earlier.”
Quilter head of retirement policy Jon Greer said: “It is forecast that the number of people over state pension age will grow significantly over the coming years while the proportion of the working-age population to support them will start to fall.
“Figures from the ONS released just last week show the number of people aged 85 and over could grow in the next 15 years from 1.6 million to 2.6 million.
“Not only will this heap pressure on in terms of state-pension cost, but it will also result in a dire strain on social care and an urgent need for increased funding.
“This morning’s report puts the state pension’s long-term sustainability into the spotlight and the government’s decision to delay last year may mean it has simply kicked an inevitability down the road for the next party to take government to deal with.
Forecasts like these only accomplish one thing: They make Astrology look respectable. (Plagiarised from JK Galbraith)
Us muppets in the private sector will be fleeced once again to pay for the gold-plated final salary schemes and the feckless benefits too.
Something needs to change soon or as a country we are going bankrupt. Final salary pensions should be abolished and those who make the rules (MPs) and those who enact them (Civil Service) should be made to work in our shoes.