Suggestions that the state pension age could be increased to 80 have been condemned as “an affront to hard-working citizens”. However, there have been calls for an “honest national conversation” about the growing cost of the state pension and the impact on younger taxpayers.
Work and Pensions Secretary Liz Kendall has launched a review of the state pension age, which is currently 66 and due to rise to 67 by 2028, before reaching 68 by 2046. One expert has suggested people could be forced to wait until they are 80 before becoming eligible for the pension, currently a maximum of £230.25 a week.
Jack Carmichael, of consultants Barnett Waddingham, said costs could soar if life expectancy rose faster than expected in areas where it is currently low.
He said: “Keeping the cost at a similar proportion of GDP would then require a massive increase in the state pension age, potentially up to the dizzying heights of 80.”
Pensions expert Ros Altmann, a former pensions minister, said: “The predictions of rising state pension age get increasingly outlandish with every new report.
“The latest warnings that people may not get a penny of state pension before age 80 is an affront to hard-working citizens who find themselves in poorer health in later life, especially after decades of National Insurance contributions or a heavy manual labour career.”
She said more than half the UK population was in poor health in their 60s, with those on lower incomes most likely to be affected.
The Government’s review will look at whether the state pension age should be set so that people spend just under a third of their adult life in retirement. No decisions have been made, the Department for Work and Pensions said.
Treasury watchdog the Office for Budget Responsibility (OBR) has predicted that the cost of the state pension will reach 7.7% of GDP by 2073-74, or around £200billion in today’s terms – up from 5% GDP or £138billion today.
The cost has grown steadily over the past eight decades, thanks largely to rising life expectancy and a low birth rate, which means the number of elderly people has risen faster than the number in work.
Costs have also increased partly because of the “triple lock” policy, under which state pension payments go up every year by the highest of inflation, average earnings or 2.5%, which the Express has campaigned to keep.
The OBR warned in a report last month that pensions are “a major contributing factor to the conclusion in each of the long-term projections we have produced over the past 15 years that, if current policy settings were to be maintained over the long run, debt would be on an unsustainable path”.
Reform UK deputy leader Richard Tice MP said his party would set out proposals for pensioners soon. He said: “We will be talking about pensions over the coming months. Given the state of the economy, the public finances and an ageing population, a grown-up and honest national conversation is clearly needed.”
Conservative leader Kemi Badenoch has said her party will retain the triple lock but said the Tories were looking at introducing more means-testing for benefits received by older people.
Think tank the Institute for Fiscal Studies warned that increasing the state pension age would hurt people on lower incomes, because they were likely to have a lower life expectancy.
Senior researcher Heidi Karjalainen said: “The state pension age is due to rise to 67 between 2026 and 2028. A key question for the upcoming independent review is whether to bring forward the next increase to 68, currently scheduled for 2044–46.
“The 2017 independent review recommended moving this to 2037–39 – a proposal the Government accepted but never legislated.
“Setting the pension age is a political judgement that must weigh up fiscal sustainability against the impact on different groups. While increasing the pension age is a rational response to rising life expectancy, it will affect some people more than others.
“At the same time, the triple lock also increases the cost of the system, and does so in unpredictable ways. Our research shows that raising the pension age while retaining the triple lock hits poorer people hardest – they typically have lower life expectancy and therefore lose more from having to wait an extra year for their state pension, while gaining less from a more generous pension in old age that the triple lock might deliver.
“To address these fairness issues, we’ve proposed additional means-tested support for those just below the state pension age. Such measures could help protect the most vulnerable groups, as well as maintain political and public support for any future pension age increases.”
Former Conservative leader Lord Hague suggested this week that young people in work were increasingly forced to pay for the pensions and healthcare of older people, and should have lower tax rates to ensure the burden was shared fairly.
He said: “The case for differential taxation – lower tax rates for young people – to reduce those burdens will become much stronger.”
Dr Priya Khambhaita, head of policy research at the Pensions Policy Institute (PPI), said: “This is absolutely the most opportune moment to review the state pension age. PPI’s recent UK Pensions Framework 2025 report highlights the need for urgent action on pension adequacy and fairness.
“Progress in these areas has stalled, and the state pension is a key tenet of retirement income. Any adjustments made could be used to enhance progress against these goals.
“A system-wide approach that considers how the state pension interacts with private savings is imperative. To ensure the state pension remains sustainable in the long term, changes could be required.
“The current review process must carefully consider not only the eligibility age, but how the state pension functions within the broader system for individuals with varying work histories, disabilities or health conditions, and across different income levels.”