The Department for Work and Pensions is seeking views on what factors to consider in determining state pension age for future decades, as input for an independent report by Suzy Morrissey.

Views are being sought “from a broad range of organisations, experts and individuals, including those who have an interest in the wider social and economic impacts of an ageing society”. 

The government has to review the state pension age by law. 

Suzy Morrissey’s report is one of two that will feed into the government’s state pension age review, the other being by the Government Actuary’s Department. 

The report by Morrissey is due to explore factors the government should consider, including: 

  

Morrissey is the deputy director of the Pensions Policy Institute and a former civil servant in New Zealand. 

 

GAD's separate report will be about the proportion of adult life in retirement. 

  

Those who wish to respond to the call for evidence launched on Morrissey’s behalf can do so until 24 October by emailing to Independent.StatePensionAgeReport@dwp.gov.uk

  

Women’s state pension age rose from 60 to 65 between 2010 and 2018 to become equal with men’s before in 2018-20, both women’s and men’s state pension age increased to 66. Under current legislation, it is due to rise to 67 from next year, and to 68 in 2044-46. Meanwhile, life expectancy increases have been slower than anticipated. 

 

Rises in the state pension age have been used to manage the cost of a benefit that currently comes with generous uprating, by the highest of inflation, earnings or 2.5%, a system which Labour has pledged to keep in place. The Office for Budget Responsibility recently said the cost of the so-called ‘triple lock’ will be £15.5bn a year in 2029-30 - three times as much as originally projected. 

 

Increases in the state pension age have led to a sharp uptick in poverty rates among people just under retirement age, as the implied extension of working lives has not been well supported by employers and the NHS. 

Previous governments have almost exclusively used an increasing state pension age to control costs, said David Pye, a client consulting director at consultancy Broadstone, adding: "It will be interesting to see if the final report recommends anything different, especially as life expectancy plateaus and our health landscape changes."

 
He argued that if the state pension age is increased or the amount provided is reduced or means-tested, it will reinforce the need for reform in the private savings landscape to ensure adequate incomes at retirement. 

It is estimated that a quarter of the UK’s population will be aged 65 or older by 2050, Stephen Lowe, group communications director at annuity provider Just Group, pointed out, meaning the burden of funding the state pension will fall on a shrinking proportion of working people.

 

“If the government wants to avoid increasing taxes or means-testing the state pension then it may have to look at options either to increase the age at which people receive the state pension or to moderate the amount paid. Neither of these are political vote winners – and as we have seen with the winter fuel and disability payments, once a benefit is introduced, it becomes extremely difficult to reduce or withdraw that support," he observed.

More than four in 10 of current recipients say the state pension accounts for the majority of their income, Lowe noted. At the same time, some people are forced to retire early due to ill health.

"If the government either limits the amount paid or pushes out the age at which the state pension age can be claimed, then some people will face a wider financial gap than they planned and will need to cover it from their own resources," Lowe noted.