PensionBee responds to a new report from the International Longevity Centre which suggests that the UK’s State Pension age will need to hit 71 by 2050 to keep up with longer life expectancy.
Becky O’Connor, Director of Public Affairs at PensionBee comments: “Such a dramatic increase to the State Pension age from the current age of 66 to possibly as high as 71 is quite an alarming prospect.“People depend on the State Pension for a significant chunk of their retirement income. It’s also key to confidence in people’s ability to retire at all.“Even the suggestion that people won’t get it until their 70s will make people feel more distrustful than they already do in the State Pension system and may cause actual worry and anxiety about their future.
“If people suffer ill health or face the need to care before 71, as is likely for many, they may have to give up work sooner than they can receive their State Pension anyway and have to claim working age benefits for longer instead.“While the sustainability of the State Pension needs to be properly examined, increasing the age people get it may not turn out to be the cost saving a government would hope for.”“PensionBee research has found that nearly half (48%) of UK savers believe they won’t be able to retire before State Pension age if and when it is raised to 68, as projected between 2044-2046. Given these findings, it’s reasonable to anticipate even more people would be forced to work for longer if the State Pension age rises to 71 by 2050, as suggested by the International Longevity Centre.
“Our research also indicated that the perceived ideal retirement age is 60 - over a decade earlier. The growing disparity between this preferred retirement age and an increasing State Pension age would mean people would have to save even more through private pensions if they wanted to retire earlier. The ‘Pre-State Pension Gap’ is the total amount of income an individual requires to cover their expenses ahead of their State Pension entitlement from other savings, and this would get bigger.
“There’s also a risk that people could use up too much of their private pension savings early in retirement if they had to stop work before State Pension age, possibly leading to greater poverty in later old age.”
