The Government is legally required to periodically review the state pension age
Chancellor of the Exchequer Rachel Reeves during a visit to the Materials Laboratory at the Royal School of Mines in Imperial College London. (Image: Yui Mok/PA Wire )
The Chancellor of the Exchequer has emphasised the importance of a review into the state pension age in order to ensure the system is “sustainable and affordable”.
On Monday, the Department for Work and Pensions (DWP) announced a review into the age at which people can receive the benefit.
This will involve an independent report, led by Dr Suzy Morrissey, on specified factors relevant to the Review of State Pension Age along with the Government Actuary’s Department’s examination of the latest life expectancy projections data.
The state pension age is currently 66, rising to 67 by 2028.
The Government is legally required to periodically review the age, with the next report due in March 2029.
On Tuesday, Rachel Reeves said it was “right” to look at the qualifying age in accordance with the increase in life expectancy.
She told reporters in London: “We have just commissioned a review of pensions adequacy, so whether people are saving enough for retirement, and also the state pension age.
“As life expectancy increases it is right to look at the state pension age to ensure that the state pension is sustainable and affordable for generations to come,” the Chancellor added.
“That’s why we have asked a very experienced set of experts to look at all the evidence.”
Head of public policy at AJ Bell, Rachel Vahey, told PA: “An increase to state pension age from 66 to 67 is already slated to happen between 2026 and 2028. But it’s less clear what will happen after that.
“There is also an increase to age 68 pencilled in for 2046, but a faster increase is definitely on the cards. The first two reviews of the state pension age advocated bringing this forward, but successive governments have treated the issue like a hot potato.
“This latest state pension age review, however, may eventually force the government’s hand,” she added.
(Image: Andrew Aitchison, In Pictures via Getty Images)
Monday’s announcement comes following warnings from experts that people looking to retire in 2050 are on course to receive £800 per year less than current pensioners.
The DWP reported that 45% of working age adults were not contributing to a pension, with concerns that the cost of living crisis is preventing people from investing in their retirement.
In a speech in west London on Monday, Work and Pensions Secretary Liz Kendall said she was “under no illusions” about how difficult it would be to map out plans for pensions in the years to come.
She added that “many workers are more concerned about putting food on the table and keeping a roof over their heads than saving for a retirement that seems a long, long way away”.