The state pension in the UK already costs the government a huge sum every year, and there are now calls for the state pension age to rise.
An estimated £100billion a year is spent on pensions, and the cost will continue to rise due to an ageing population.
A rise in the state pension age could stop this cost from inflating even further and plans to do this should be brought forward, say economists at one think tank.
The International Longevity Centre-UK (ILC) published a report ahead of the government's review of state pensions in 2023 recommending that the state pension age rise "to ensure fiscal sustainability, support intergenerational fairness and keep up with increases in life expectancy".
Those approaching retirement age will not be keen to see the state pension retirement age rise further, and there are fears the triple lock on pensions could be scrapped, subject to a review.
What is the current state pension age?
The current state pension age is 66 and is subject to regular reviews.
Pensions become costlier as the population ages due to improving life expectancy figures.
The Office For National Statistics said in 2020: "Life expectancy has increased in the UK over the last 40 years, albeit at a slower pace in the last decade.
"In the latest period, 2018 to 2020, life expectancy at birth in the UK was 79.0 years for males and 82.9 years for females."
What is the triple lock?
Pension costs are a huge expense for the government and can be difficult to keep on top of. The triple lock adds to this expense and ensures that the government increases the value of the state pension in line with the highest of the following factors:
- By 2.5%.
- Average earnings growth year-on-year for the May to July period.
- Inflation (using the consumer prices index measure) in the year to September.
The triple lock was suspended for a year in November and became a double lock.
It stopped the lock based on average earnings as it was estimated that earnings growth were distorted due to a rise in wages as people came off the Covid furlough scheme.
A 2019 report by the Intergenerational Foundation estimated: "Those receiving pensions of over £50,000 are costing the nation over £1.2billion each year, and the number receiving them has increased by 239% in just seven years."
Will the state pension age rise?
Currently, a rise to 67 for those born on or after April 6 1960 should come into effect by 2028, and a rise to 68 between 2044 and 2046 for those born on or after April 6 1977.
This could change due to possible recommendations in a government review set to be published by May 2023.
They said: "The first Review of State Pension age was undertaken in 2017 and concluded that the next review should consider whether the increase to age 68 should be brought forward to 2037-39 before tabling any changes to legislation."
Some think tanks and other experts, meanwhile, believe the increase should be brought forward even earlier than this.
