DWP told state pension age at 69 ‘should be assessed’ | Personal Finance | Finance

The Government may have to take a serious look at raising the state pension age to 69 as a new report comes out looking into the issue.

Labour announced recently there will be another review of the access age for the state pension, which is currently 66 for both men and women.

The last independent review looking at the issue was carried out in 2022, by Baroness Neville-Rolfe. This included a particular recommendation that may well be visited again in the next report.

In her recommendations, she said: “Current projections of GDP and state pension-related expenditure suggest that state pension age should rise to age 69 over the period 2046-48.

“This possible rise should be reassessed at the next state pension age review in the light of new fiscal and life expectancy projections.”

She also suggested the increase to 68 should take place between 2041 and 2043. Such a policy would mean bringing forward the current timetable for moving up the state pension age.

Legislation is in place for the access age to gradually move up from 66 to 67 between 2026 and 2028 and then to go up from 67 to 68 between 2044 and 2046.

The previous Conservative Government decided not to take on any of the recommendations in the 2022 report although it did say there should be another review of the state pension age within two years of the next Parliament.

With the next review soon to take place, Labour has set out the key elements that the review will look at. These will include the question of linking the state pension age to life expectancy and the role of the state pension age in keeping the state pension affordable and sustainable.

The previous 2022 report recommended there should be “a fixed proportion of adult life” that people expect to spend receiving their state pension, and that this should be 31 percent of adult life.

Baroness Neville-Rolfe also advised that the Government should set a limit on its state pension expenditure of up to 6 percent of GDP.

However, some experts fear these principles could be a bit simplistic. Mark Pemberthy, benefits consulting leader at consultancy group Gallagher, said: “Limiting the cost of state pension as a percentage of GDP is complex and will be dependent on a number of variables including how successful our economy is in the future and also how fast the state pension is increased each year.

Currently this is the higher of inflation, earnings or 2.5% [under the triple lock policy] – all of which are significantly higher than our forecast GDP growth over the next few years.

“The triple lock will not be part of the state pension age review, but must be a consideration in the wider pension review if pensions are going to be sustainable for future generations. “

The full new state pension now pays £230.25 a week, after payment rates went up 4.1 percent in April in line with the triple lock.