Kim Kat
As millions of Britons prepare for retirement, the Department for Work and Pensions (DWP) is once again under the spotlight, confirming that a new review of the state pension age is underway.
Speculation is mounting that 69 could become the new retirement age, sparking anxiety among future pensioners.
Currently, the state pension age stands at 66, but legislation is already in place to raise it to 67 between 2026 and 2028, with another increase to 68 between 2044 and 2046.
However, fresh discussions prompted by Labour could push this threshold to 69 – a move that could impact millions of workers planning for their financial future.
Why Is the State Pension Age Under Review?
The last comprehensive review of the state pension age was conducted in 2022 by Baroness Neville-Rolfe. It concluded that the pension age must rise to keep the cost of the state pension within 6% of GDP.
It also proposed that individuals should receive the state pension for no more than 31% of their adult life.
This has led to the suggestion that a retirement age of 69 could begin from 2046. Although this is not yet law, it has gained renewed traction under Labour, who have called for an updated review that takes into account recent economic and demographic shifts.
Key Drivers Behind a Potential Pension Age Increase
- Life Expectancy Trends:
While life expectancy rose consistently for decades, the COVID-19 pandemic disrupted this trend, and figures remain lower in 2024 than in 2019.
Variations based on occupation, income, and geography further complicate decisions. - Fiscal Responsibility:
The UK government aims to cap pension-related expenditure at 6% of GDP. But this is challenging as pension payments increase faster than GDP growth, particularly due to the triple lock system. - Triple Lock Impact:
Under the triple lock, state pensions rise annually by the highest of:- Inflation
- Average earnings
- 2.5% minimum
Implications of Raising the Retirement Age to 69
Pros:
- Helps reduce strain on public finances
- Aligns with increased life expectancy projections
- Could make pensions more sustainable for future generations
Cons:
- May disproportionately affect low-income and manual workers
- Delays retirement benefits for people in poor health
- Increases economic inequality among retirees
Latest Figures and Future Forecast
| Pension Element | Current/Planned Value |
|---|---|
| Current State Pension Age | 66 |
| Scheduled Rise to Age | 67 (by 2028) |
| Proposed Further Rise | 69 (from 2046, under review) |
| Weekly Full New State Pension | £230.25 (as of April 2024) |
| Triple Lock Policy | Higher of inflation, earnings, or 2.5% |
| Pension-Related GDP Cap Target | 6% |
| Proposed Life Span Pension Duration | 31% of adult life |
Public Concerns and Expert Views
Mark Pemberthy, a pension expert from Gallagher, highlighted that limiting pension costs as a share of GDP is “complex and dependent on variables” like:
- Economic growth
- Inflation
- Wage increases
He warns that “some groups may not live long enough to fully benefit” from their pension if the retirement age keeps rising. Manual workers, those in ill health, or from socio-economically disadvantaged regions may face the harshest consequences.
Will the Triple Lock Be Reviewed Too?
While the triple lock will not directly be part of the state pension age review, many experts believe it must be factored in to ensure the system’s long-term sustainability.
With higher annual increases putting pressure on government budgets, reforming the triple lock may eventually be unavoidable.
The possibility of raising the state pension age to 69 is no longer just speculation—it’s under formal review. While the change won’t happen immediately, its potential implementation from 2046 could affect a large portion of the population currently in their 30s and 40s.
The government’s challenge lies in balancing affordability with fairness, ensuring the state pension remains viable without punishing those unable to continue working into older age.
As discussions unfold, it’s crucial for individuals to plan their retirement strategy early, factoring in possible policy shifts and savings requirements.
FAQs
When will the state pension age rise to 67?
The state pension age will rise from 66 to 67 between 2026 and 2028, as per current legislation.
Is the state pension age definitely increasing to 69?
No. While a review is underway, and 69 has been proposed, it is not yet confirmed or enacted into law.
How much is the full new state pension in 2024?
As of April 2024, the full new state pension stands at £230.25 per week, following a 4.1% increase under the triple lock.