The newly elected Labour Government plans to raise the state pension age 71 as concerns over the retirement benefit's affordability arise.
State Pension Age Could Rise to 71 as Labour Consider Changes
Currently, people in the UK can access the Department for Work and Pensions (DWP) payments once they attain the age of 66, however this may change in the future.
As of now, the state pension age is set to increase to 67 by 2026-28 and then to 68 by 2044-46.
Although MPs have previously voted on this timeline, a separate investigation is likely to determine when the state pension age will be raised to 68.
Previous assessments advised a climb to this level in 2037-39, with a 2022 review indicating a slower growth to 68 by 2041-43.
The same assessment suggested an age increase of 69 in 2046-48.
While the previous government confirmed the investigation's results, a decision on the final age increase has been deferred.
Another revision of the state pension age is promised during the first two years of the current parliament.
Experts Warn of Rising State Pension Costs and Potential Age Increases
Andrew Oxdale, deputy head of communications at financial giant Fidelity International, discussed the various possibilities for raising the age restriction.
Notably, some researchers and economists have advocated for access to the state pension at the age of 71.
Oxdale explained: “Various think-tanks have warned about the unaffordability of the State Pension.
“The latest came earlier this year from the International Longevity Centre. It suggested the state pension age would have to rise to 70 or 71 by 2050 to remain affordable.
“The ILC warned of ‘widening demographic imbalances’ that would heap pressure on Government finances.
“It also highlighted that younger people lack the savings and assets that their parents and grandparents had.
Previous targets aimed to maintain this number below 6%, which might be attained by the late 2040s.
Nevertheless, experts warn that the Labour Party faces a rocky road in navigating the increasing cost of the state pension.
Oxdale further stated: “Retirement age changes are unavoidably emotive. It is surprising, in fact, that legislation in the UK has been passed to increase the age in recent decades with little backlash.”
“Consider, for instance, the violent pensions protests that have repeatedly erupted in France and the Russian demonstrations of 2018. The reason this issue may return to the headlines in the UK in the coming months is because a decision to accelerate the rises was delayed ahead of the election but will need to be dealt with imminently.”