UK state pension age explained – could it hit 70? | Personal Finance | Finance

People born after 1970 in Denmark are set to face the highest state pension age in the world by the year 2040. The country has passed new laws that link the Danish state pension age to life expectancy, currently 81.7 years.

With this system, any changes in longevity will automatically adjust the pension age accordingly, a concept similar to one already in place in the UK.

Experts are now suggesting that as a result of Denmark’s legislation, it seems “almost inevitable” the UK will follow suit by raising the state pension age to 70. In the UK, the present age for state pension eligibility is 66, but questions loom on how much further this might rise.

Typically, the state pension age marks the earliest time people can begin receiving their state pension and is designed to be proportional to the nation’s average lifespan, ensuring people spend an appropriate amount of time in retirement funded by the pension.

In the UK, a rise to 67 is already planned between 2026 to 2028, affecting those born after April 6, 1960, while a further rise to 68 between 2044 and 2046 will affect those born post-April 5, 1977.

However, Jason Hollands, managing director at Evelyn Partners, expressed to the i Paper his belief that Britons will likely face a retirement age of 68 before the mid-2040s.

Under the Pensions Act 2014, the state pension age is subject to review at least every five years. The previous review commenced in December 2021.

The expert suggested that due to medical advancements, life expectancy could significantly increase over the next few years, potentially prompting an increase in the state pension age.

Sir Steve Webb, the former pensions minister and now a partner at LCP, said: “Pension ages are rising across the developed world as countries come to terms with the combination of people living longer and fertility rates dropping, meaning there will be fewer workers in future to fund pension costs.”

Other experts have argued that it is unfair to compare the UK and Denmark pension systems, because Denmark’s incorporates a means testing element and early retirement options that the UK scheme doesn’t hold.

Currently, Denmark’s state pension age stands at 67, one of the highest globally on par with countries like Italy, Australia, the Netherlands, Greece, and Iceland.

Only a handful of countries maintain a state pension age below 60, including Sri Lanka at 55, Indonesia at 58, and Bangladesh at 59.