Government launches early review of state pension age

Work and pensions secretary Liz Kendall has announced a review of the state pension age, commissioning two independent reports for Government to consider when deciding the state pension age for future decades.

The government is set to begin its latest review of the state pension age earlier than expected, despite a legal requirement to undertake such assessments only once every six years. The most recent review was completed in 2023.

This early reassessment will examine whether the existing pension age remains appropriate, taking into account a range of factors, including shifts in life expectancy.

During a speech to announce the relaunch of the Pensions Commission, Kendall warned that the triple lock guarantee is costing £31bn a year.

The triple lock, introduced in 2010, means that the state pension rises by the highest of the average earnings growth, CPI inflation, or 2.5%.

Currently the state pension age is 66 for both men and women. This age will increase to 67 between 2026 and 2028 and is set to rise to 68 in 2044. However, last year the International Longevity Centre suggested that anyone born after April 1970 may have to wait until they were 71 to claim the state pension.

Kendall acknowledged the challenges ahead, stating she is "under no illusions" about the complexity of planning for the long-term future of pensions, particularly as households continue to feel the strain of the ongoing cost of living crisis.

Jordan Clark, financial planner at Quilter, commented: "Today’s announcements from the government suggest state pension age rises are on the table, and without sensible reform to the triple lock then there may be no choice. The working-age population needs to be prepared to work later into life, with adequate private pension provision being the only route to avoiding this. There is a real need for bold and innovative solutions to the problems faced, and arguably speed is of the essence.”

Damon Hopkins, head of DC workplace pavings at independent financial services consultancy Broadstone, added: “The launch of the State Pension Age Review is a necessary step and we would not be surprised to see an acceleration applied to the increase of the state pension age. The combination of an ageing population and the huge fiscal cost of the state pension would suggest that a change is inevitable. A lower or later state pension would, of course, double down the need for reform in the private savings landscape.”