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The Government has announced a review of plans to bring forward raising the State Pension age to 68 amid concerns about the impact of Covid and growing inequality on healthy life expectancy.
The Government has launched the second State Pension Age Review review which could see the retirement age raised to 68 sooner in less than two decades.
The State Pension age review is a legal requirement and must be conducted by 7th May 2023.
The age at which people can draw the State Pension is currently 66. This will rise to 67 for those born on or after April 1960; and to 68 between 2044 and 2046 for those born on or after April 1977. The first Review of State Pension age was undertaken in 2017 and concluded that the next Review should consider whether the increase to age 68 should be brought forward to 2037-39.
This is in light of greater longevity and worries about the burden on taxpayers. The review will consider a wide range of evidence, including the implications of the latest life expectancy data, the costs of an ageing population and future State Pension expenditure and labour market changes and people’s ability and opportunities to work over State Pension age. It also aims to develop options that are transparent and fair.
The International Longevity Centre [ILC] says any legislative changes to State Pension age need to be preceded by a levelling-up of healthy life expectancy, particularly in light of the impact of Covid-19 on older workers.
David Sinclair, Director of the ILC, said: “The Government has set itself an ambitious target of tackling inequalities in life expectancy, but there hasn’t been an adequate plan to realise this goal.
“Considering how effectively we support people to work longer must play a part in the decision about whether to increase the State Pension Age. Yet older workers have been hit hard by Covid-19.
“The Government has now announced its plans for the next Independent State Pension Age review. If they want to follow their plans to increase the age we receive our pensions further, they must be clear about how they will mitigate the impact on those of us who aren’t living longer and healthier lives.
“It is vital that Government doesn’t dodge the inequalities issues. We need a plan to level up healthy life expectancy.”
A report from law firm Lane, Clark & Peacock says the increase in the state pension age should be delayed by more than 20 years because of slowing life expectancy. It says that since the plans for the increase were drawn up, official estimates of longevity have been scaled back – even before the effect of the Covid pandemic. As a result, LCP argues that the move to 67 should not come until 2051 and the rise to 68 not before the mid-2060s.