Denmark makes brutal change to state pension and UK ‘could be next’

The Nordic country will soon have the oldest workers in Europe, but the UK might not be far behind, it is feared.Denmark makes brutal change to state pension and UK ‘could be next’

Denmark has made a brutal change to the state pension with warnings the UK could be “next”. The Nordic country will soon have the oldest workers in Europe, but the UK might not be far behind, it is feared.

The Nordic country recently raised the state pension age to 70, a change that will kick in by 2040. In the UK, the Department for Work and Pensions (DWP) state pension age is currently 66 and scheduled to gradually rise to 68 by 2046.

“I don’t think we can really afford to [wait to the 2040s], to be frank,” Nigel Farage, the Reform UK leader, told The Telegraph last week. “If there is a sudden economic miracle, then it might change that. But it does not look to be happening any time soon.”

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Liz Kendall, the Work and Pensions Secretary, announced a review into the state pension age last week in an effort to address the problem.

“There’s kind of cross party consensus that … we need to increase the state pension age to deal with the rising cost of the state pension system,” says Heidi Karjalainen, an economist at the Institute for Fiscal Studies.

Wouter De Tavernier, a pensions economist at the OECD, said: “It avoids having to restart the same discussions over and over again, and therefore making long term financial sustainability dependent on political decisions and political calculations about what might or might not be popular in the elections.”

“When we ask workers, the vast majority, 75pc, are against this increase,” says Ashournia. “They worry that they won’t be able to work until the retirement age, when we increase it by such an amount.”

“I think the higher the state pension age goes, just kind of psychologically, people think of someone aged 65 and someone aged 70 as kind of very different types of people,” she says.

“We can’t just keep increasing the retirement age forever, because it becomes unrealistic for workers to work for so long,” says Ashournia.

Mette Frederiksen, Denmark’s prime minister, said: “We no longer believe that the retirement age should be increased automatically. You can’t just keep saying that people have to work a year longer.”