The state pension age in the UK is set to rise in the coming years, with growing pressure on the Government to increase it further to 70.
Currently at 66 for both men and women, plans are already in place to raise the age to 67 between 2026 and 2028, and then to 68 between 2044 and 2046.
However, experts warn that these timelines may need to be revised due to various factors, including an ageing population and longer life expectancy.
The new Labour Government faces mounting pressure to maintain the viability of pension funds, potentially leading to earlier and more significant increases in the state pension age.
Chris Ball, managing partner at Hoxton Wealth, warns that the state pension age could potentially rise to 70 by the 2040s.
He explained: “If the state pension age is pushed to 70, we might expect this to happen around the 2040s, given the current pace of change.
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Pensioners may have to wait longer for payments GETTY “However, the Government would need to strike a careful balance between financial sustainability and ensuring that people who’ve worked for most of their lives have sufficient support in their later years.”
Ball notes that while legislation is already in place for a gradual increase to 68, further increases will depend on factors such as longevity trends, public finances, and the political landscape.
He emphasised the need for a delicate balance between ensuring the pension system’s sustainability and providing adequate support for retirees.
Despite this call for reform to the retirement age, analysts have been at odds over when this should take place.
Many have highlighted that urgent change is needed due to the cost on the taxpayer as a result of the benefit.
Based on figures from the Office for Budget Responsibility (OBR), the state pension costs the taxpayer £110.5billion, accounting for 42 per cent of total welfare expenditure.
Fiona Peake, pensions expert at Ocean Finance, offers a different timeline for the potential increase to 70.
She suggests: “Given the demographic trends, it’s likely the pension age could reach 70 by the 2050s, though no definitive timeline exists.”
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State pension age will rise to 67 by 2028 then it will further increase to 68 GETTY“Many people, especially those in physically demanding jobs, may find it difficult to work into their late 60s or 70s.”
As the state pension age increases, experts stress the importance of supporting longer working lives.
“Changes to employment such as flexible working or phased retirement could help with this, as well as retraining so older workers have the skills they need,” Ball added.
“Investments in preventative healthcare and mental health support, for example, would reduce the likelihood of people being forced to leave the workforce prematurely.”