State Pension Age rise to 68 to be reviewed

Mr Stride confirmed, however, that a planned rise in the State Pension Age to 67 between 2026 and 2028 will go ahead.

There will be a review of the subsequent planned rise to age 68 by 2046.

The moves comes amid concerns about the fairness of increasing the State Pension Age when the rise in life expectancy since the war has plateaued in the last decade.

Life expectancy has also fallen slightly since the Covid-19 pandemic.

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Mr Stride said the review of the planned rise to 68, “delivers on Government responsibility to ensure the State Pension remains sustainable and fair across the generations.”

Mr Stride said the that after carefully considering expert evidence, including two independent reports, he concluded that the planned pension age rise from 66 to 67 for those born after April 1960 remains appropriate.

The Pensions Act 2014 requires the Secretary of State for Work and Pensions to regularly review State Pension age.

To inform the review, two independent reports were commissioned, analysis from the Government Actuary based on life expectancy projections and the proportion of adult life spent in retirement and findings from Baroness Neville-Rolfe on relevant factors, including life-expectancy trends.

The Government said that as the number of people over State Pension age increases, it must ensure the State Pension remains sustainable and fair.

The review will look at the emerging evidence on the long-term impact of recent challenges, including the Covid pandemic and global inflationary pressures. These events have brought a, “a level of uncertainty” in relation to the current data on life expectancy, labour markets and the public finances, the Government said.

Mr Stride said: “It’s essential the State Pension remains sustainable and fair across the generations. Our balanced approach will help achieve this and ensure we continue to provide security and dignity in retirement for millions of people across the country.

“The Government remains committed to the principle of providing 10 years notice of changes to State Pension age, enabling people to plan effectively for retirement. All options for the rise to the State Pension age from 67 to 68 that meet the 10 years notice period will be in scope at the next review.”

Tom Selby, head of retirement policy at AJ Bell, said: “Given we have literally seen rioting on the streets in France in response to a proposed rise in the state pension age, it comes as no surprise that the UK government has backed away from the idea of accelerating a planned rise in the UK state pension age to 68.

“With less than two years to go until the general election, hiking the state pension age faster would likely have been political suicide for the Conservatives, who are already trailing Labour in the polls. The decision will come as a huge relief to people in their late 40s and early 50s who could potentially have been forced to wait an extra 12 months to receive their state pension as a result.”

Nigel Peaple, director of policy & advocacy at the Pensions and Lifetime Savings Association, said; “This is a very positive step for future pensioners as most people will rely heavily on the State Pension to make up the majority of their retirement income.

“As an increase in the State Pension Age falls disproportionately on people with lower incomes – who generally have poorer longevity – this decision, along with the 10.1% rise in State Pension next month, will support those who need it most.”

Former Pensions Minister Baroness Ros Altmann said: “I am delighted that the State Pension Age review will not lead to an acceleration of the rises in State Pension Age already legislated for. The Government is right to recommend a wait and see approach, with further studies to understand better the full impact of both Covid – and the consequential backlogs in the healthcare system – on previous forecasts for life expectancy.

“A proper study, to be carried out in the next couple of years, will provide more essential information on which to base this important element of British welfare policy.”

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