Labour is looking at moving up the state pension age, even as life expectancy stalls in the UK. What does this mean for future retirees?
London: So, it looks like the Labour Government is thinking about bumping up the state pension age. They’re considering this even though experts say life expectancy in the UK isn’t really improving.
According to GB News, some research suggests that to keep pension payments manageable, the retirement age might need to hit 71 by 2050. That’s a big jump!
A study from the International Longevity Centre (ILC) warns that the UK is facing some serious demographic challenges. They say we could end up with just one working adult for every pensioner by 2050. Yikes!
Earlier this month, the Daily Express mentioned that the state pension could become too expensive to handle by 2035. That’s not far off!
The Adam Smith Institute pointed out that in 2021, the total obligation for the State Pension was a whopping £8.9 trillion. And it’s only going to get bigger because of the triple lock system.
They also noted that someone born in 1956 could end up getting £291,000 more than they actually paid in. That’s quite a return!
Right now, the plan is to raise the state pension age from 66 to 67 between 2026 and 2028, and then to 68 between 2044 and 2046. But that might change soon.
Jonathan Gribb from the Institute of Fiscal Studies (IFS) told GB News that the government will be reviewing the pension age timeline to avoid financial issues down the line.
Life expectancy has actually dropped a bit. The Office for National Statistics (ONS) reported that men in England saw a decline of 1.7 years in life expectancy from 2021 to 2023 compared to 2017 to 2019. For women, it was even worse, with a drop of 1.9 years.
Experts are saying that this decline in healthy life expectancy should really be part of the conversation about raising the pension age.
Helen Morrissey from Hargreaves Lansdown pointed out that with the state pension age already at 66 and going up, people are often planning to access their private pensions in their mid-sixties. There’s a real gap in planning that needs to be addressed.
