State pension age increases could be reconsidered as UK life expectancy growth slows, according to Pensions Minister Torsten Bell.
The upcoming review of the state pension age, scheduled for 2029, may need to factor in the lack of growth in life expectancy.
Currently, the pension age is set to rise from 66 to 67 between 2026 and 2028, and to 68 by 2046. Some experts have even suggested raising it to 70 by 2040 to maintain financial sustainability.
However, recent Office for National Statistics (ONS) data shows concerning trends in life expectancy. Between 2021 and 2023, life expectancy at birth for men in England fell by 1.7 years compared to 2017-2019.
For women in England, it dropped by 1.9 years during the same period. In Wales, the decline was 1.1 years for men and 2.2 years for women.
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Earlier than expected state pension increases could be delayed due to life expectancy data GETTYSpeaking at the Pensions and Lifetime Savings Association’s (PLSA) annual conference in Edinburgh last week, Bell acknowledged the slower pace of life expectancy growth.
He clarified that life expectancy has not actually declined but rather is not increasing as quickly as before. “The rise in longevity is falling in that it’s not rising as fast as we would all like,” Bell said.
He noted that the next state pension age review may need to consider this trend. “It’s not just a pensions issue. It’s about our health system; it’s a big problem for the country,” he added.
Bell described the situation as a “slowdown in the pace of progress” and stressed that it still represents a setback.
The Pensions Act 2014 requires the Government to review the state pension age every six years.
From October 2020, the state pension age for both men and women rose to 66. Currently, two state pensions are available: the basic state pension and the new state pension.
The full basic state pension is worth £169.50 per week and is available to men born before April 6, 1951, and women born before April 6, 1953.
The new state pension is worth £221.20 per week and is available to men born on or after April 6, 1951, and women born on or after April 6, 1953.
To receive any state pension, people must have at least 10 qualifying years on their National Insurance (NI) record.
The number of qualifying years determines how much state pension a person will receive. Usually, to get the full rate, a person should have at least 35 qualifying years.
Jonathan Cribb, an associate director at the Institute of Fiscal Studies (IFS), has raised concerns about how pension age increases affect different socioeconomic groups.
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“The Government will shortly be considering whether to bring forward the following age rise to 68, which is currently scheduled for 2044,” he said.
While Cribb acknowledged the principle behind these increases, he highlighted a significant issue. “It is poorer people in their mid 60s who are hit most by state pension age increases,” he explained.
He noted that many of these individuals are not employed, sometimes due to poor health. “They also often have little savings or private pensions to fall back on,” Cribb added.
He pointed to evidence from previous pension age increases, stating: “We know that poverty rates rose substantially among those in their mid 60s following previous pension age increases.”