A recent report has suggested that the state pension age should be raised to 70 or 71 by 2050, in order to keep up with longer life expectancy.
The International Longevity Centre has warned its analysis suggests Britain will need to increase the threshold to 71 by 2050 to maintain the number of workers per retiree.
The research found the state pension age could need to hit 70+ as early as 2040 to maintain the current ratio if the time spent in full-time education was accounted for, by defining the UK’s working adult population as 20 to 64 years.
A recent stalling in life expectancy during the austerity years and Covid-19 pandemic eased the pressure for increases to the state pension age beyond 67 after 2027, but, in the longer-term, there is pressure to increase it to 68 or 69 before that, the International Longevity Centre (ILC) said.
The report found workers exiting the workforce long before they reach state pension age reduce the funding available to pay for the state pension, with ill health being one of the key reasons for this.
While a solution is to enable people to work for longer, the think-tank warned this is challenging, as research found that by age 70, only 50 per cent of adults are disability-free and able to work.
As it stands, the state pension age will increase to 67 between May 2026 and March 2028 and rise to 68 from 2044, under current plans.
However, the centre’s report highlighted that those born after April 1970 may need to work until 71 if they are to claim their full retirement entitlement.
The state pension age could rise to 71
Becky O’Connor, Director of Public Affairs at PensionBee, said such a dramatic increase to the state pension age was an “alarming prospect”, pointing out people depend on the payment for a “significant chunk” of their retirement income and often provides confidence in people’s ability to retire.
She added: “Even the suggestion that people won’t get it until their 70s will make people feel more distrustful than they already do 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.”
Nearly half (48 per cent) of UK savers think they will be unable to retire before the UK state pension age, if and when it is raised to 68, as projected between 2044 and 2046, according to PensionBee research.
The survey also indicated the perceived ideal retirement age is 60.
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