Think tank proposes raising State Pension age to 75
The CSJ’s report Ageing confidently – Supporting an ageing workforce suggests first increasing the SPA to 70 by 2028 then upping it to 75 by 2035. The change would hit hundreds of thousands of people currently aged 50 to 64.
Currently, the State Pension age is due to rise to 67 between 2026 and 2028 then up to 68 between 2044 and 2046.
The think tank, fronted by former Conservative leader Iain Duncan-Smith, said that the changes would “ensure that the old age dependency ratio remains in the sustainable range of 20 to 25 over the next 20 years”. It added that Britain’s ageing population and increases in life expectancy have meant taxpayers face escalating cost unless people stay in work for longer.
The CSJ said half of all adults will be over 50 by the mid-2030s, and that the UK has fewer older people at work than similar nations. It says hundreds of thousands of people aged 50 to 64 are deemed “economically inactive” and recommends helping older people “access the benefits of work” by providing support to them and employers, such as increased access to flexible working and training opportunities.
CSJ chief executive Andy Cook said: “Right now, we are not doing enough to help older people stay in work and the state pension age doesn’t even closely reflect healthy working life expectancy. By increasing the state pension age, we can help people stay in gainful and life enhancing employment while also making a sound long-term financial decision.”
Helen Morrissey, pension specialist at Royal London said: “While such proposals will undoubtedly save money, raising state pension age so quickly will cause huge issues for many retirees who will not have been given adequate time to prepare. We need to give careful thought to what kind of jobs people in their 70s are able to do and while some people will be able to work on for longer others simply won’t be able to.
“These people will face severe financial hardship if they have not saved enough into a pension to cover the years between leaving work and claiming state pension. The government needs to think carefully before taking such drastic action.”