The government will not accelerate the state pension age rise to 68, saying it plans to have a further review within two years of the next parliament. The rise to age 67 will go ahead as planned by the end of 2028.  

 

The state pension age review was published on Thursday, with input from the Government Actuary about life expectancy projections and the proportion of adult life spent in retirement, and a report by Conservative peer Baroness Neville-Rolfe.

 

The government has now said it plans to have a further review within two years of the next parliament to reconsider the rise to age 68. 

 

Work and pensions secretary Mel Stride said: “The government remains committed to the principle of providing 10 years’ notice of changes to state pension age, enabling people to plan effectively for retirement. All options for the rise to the state pension age from 67 to 68 that meet the 10 years’ notice period will be in scope at the next review.” 

 

The rise is currently legislated to take place in 2044-46, but the government had accepted a recommendation by the 2017 Cridland review that the increase should be brought forward to 2037-2039, subject to a further review. In January this year, reports in the Sun newspaper said the government could bring state pension age up to 68 as early as the mid-2030s. 

 

Not pressing ahead with the faster timetable “gives the government appropriate time to take into account evidence which is not yet available on the long-term impact of recent challenges, including the Covid pandemic and global inflationary pressures”, the Department for Work and Pensions said. 

 

The decision comes as longevity increases have slowed down in the UK, and France is crippled by widespread protests against a mandated rise in the state pension age from 62 to 64 which forced King Charles III to postpone a scheduled visit to the country. 

 

Waiting until 2046-48 to increase state pension age instead of 2037-39 could cost more than £60bn, the Institute for Fiscal Studies recently said. 

 

Any future decision on the state pension age will include life expectancy and population projections updated with 2021 Census data and the latest demographic trends, the economic position and the impact on the labour market of the recently announced package of measures to tackle inactivity, the government said. The government has previously said it would aim for “up to 32%” of adult life to spend in receipt of the state pension. 

 

 

The pensions industry has welcomed the announcement that SPA will not rise to 68 sooner than scheduled. The Institute and Faculty of Actuaries, whose Continuous Mortality Investigation had pointed to high excess deaths last year, was among them. 

 

“Increasing longevity has been the driving force behind previous rises in the state pension age and it is right that government properly assesses longevity trends before accelerating any planned increase in state pension age,” said IFoA president Matt Saker. 

 

“The IFoA is keen to encourage policy decisions which provide a stable environment for people to save for the long term through a pension, and which remove unnecessary barriers or disincentives to doing so. Government must now engage with the wider pensions industry on short term longevity trends and their impact on future state pension age rises,” he added. 

 

Nigel Peaple, director of policy and advocacy at the The Pensions and Lifetime Savings Association, said the decision to not change the current timeline was a very positive step for future pensioners, since most people will rely heavily on the state pension to make up the majority of their retirement income.  

 

“As an increase in the State Pension Age falls disproportionately on people with lower incomes - who generally have poorer longevity - this decision, along with the 10.1% rise in state pension next month, will support those who need it most,” Peaple said. 

 

 

But the Trades Union Congress said the government climbdown was “no cause for celebration”. 

 

Its general secretary Paul Nowak said: “Life expectancy at retirement has fallen by two years since the last time the state pension age was reviewed six years ago, which is why the government's own review recommended delaying the increase to 68." 

 

Having yet another review after the next election was a worry for workers, Nowak noted.  

 

“It looks like the government just wants to keep asking the same question until it gets the answer it wants,” he said. 

 

"The real problem is that ministers are failing to deal with the health inequalities that lead to falling life expectancy in poor areas and that mean many in low-paid jobs are already unable to work to state pension age,” Nowak argued.