Ministers have reportedly decided to postpone plans to bring forward the increase in the UK state pension age to 68, amid falling life expectancy and fears of voter backlash. The state pension age, currently 66, was due to rise to 68 after 2044, but earlier reports suggested the increase could be moved to between 2037 and 2039.
According to the Financial Times, the government has delayed the decision until after the next general election, due to concerns about a revolt by middle-aged voters. An announcement expected in May is now unlikely until at least spring 2024. The pension age is still set to rise to 67 by the end of 2028.
A government source told the FT: “They were gung-ho to raise the pension age. But they got cold feet.” There were concerns about voters having to work longer, especially after Chancellor Jeremy Hunt relaxed tax rules on pensions for the wealthy by scrapping the lifetime allowance. However, government insiders denied any link, insisting ministers needed more time to consider falling life expectancy data.
Sir Steve Webb, a former pensions minister, said: “The improvement in life expectancy at retirement that was predicted at the time of the last [pension age] review, basically didn’t happen. Life expectancy at retirement now is two years shorter than it was when they did the last review.”
The state pension bill is estimated to rise to about £148bn by 2027/28 from £110bn in 2022/23, according to the Office for Budget Responsibility. A Department for Work and Pensions spokesperson said: “The government is required by law to regularly review the state pension age and the next review will be published by 7 May.”
