UK State Pension Age Set to Rise to 71
Experts predict that soon, the retirement age in the UK will climb to 71. This change is deemed necessary due to research findings on life expectancy and birth rates, which indicate that the current system is unsustainable, particularly due to preventable health issues.
Currently, the UK pension age stands at 66, but it’s slated to increase to 67 between May 2026 and March 2028. Further projections suggest it will reach 68 by 2044. However, experts argue that these adjustments are insufficient.
According to recent research, individuals born after April 1970 might need to continue working until they reach 71 before becoming eligible for pension benefits. This adjustment could potentially increase even further due to the significant number of workers exiting the workforce prematurely because of preventable health problems.
Les Mayhew, an authority in global research and a professor, emphasizes the need for a shift to 70 or 71 to sustain the current worker-to-pensioner ratio. Moreover, the consideration of preventable ill health could necessitate an even higher age requirement.
Research reveals that by age 70, only half of adults in England and Wales remain fit for work due to disabilities. A shrinking workforce coupled with a large economically inactive population poses challenges for funding pensions and creates labor shortages.
Pensioner benefits are estimated to cost the UK government £136bn in 2023-24, with a substantial portion allocated to state pensions. While raising the pension age is a consideration, experts like Jonathan Cribb highlight the need for a comprehensive approach that addresses the broader financial landscape, including health and social care funding.
The Intergenerational Foundation underscores the importance of addressing who bears the burden of increased pension age. Younger generations face economic challenges, with diminishing wealth compared to previous generations, posing concerns about their retirement prospects.
Suggestions for addressing the issue range from basing pension age on life expectancy and occupation to implementing a wealth tax to fund retirement. The focus on improving health outcomes from an early age through adulthood is also deemed crucial by experts like Andrew Scott.
Increasing the pension age without accompanying support for workers with health issues could worsen existing inequalities, cautions David Finch. Government initiatives aim to address these concerns through employment and skills support for older workers and investment in health services.
While the government asserts its commitment to ensuring a sustainable and fair pension system, the debate around the future of retirement age and pension provision continues. Balancing economic viability, fairness, and support for all generations remains a key challenge for policymakers moving forward.
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