State pension age could rise to 70 as DWP launches huge new review
Work and Pensions Secretary Liz Kendall has commissioned the review of the official retirement age and said she would be considering automatic increases.
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The review will look at whether it could be worth linking the state pension age to life expectancy.
Ministers are considering changes to the state pension age as part of a bid to boost public finances.
The state pension age is currently set at 66.
Under current plans, it will rise to 67 between 2026 and 2028.
It's then set to rise again to 68 between 2044 and 2046, with a review to be carried out every six years.
Using 2022 projections, the average 66-year-old man in 2025 is projected to live another 19.2 years.
This is expected to rise another 1.9 years by 2050.
For women, the average 66-year-old can expect to live another 21.8 years.
Their life expectancy will also increase by 1.9 years by 2050.
Officials fear that with rising life expectancy and dropping birth rates, the cost of health and social care will increase dramatically in the coming years with an ageing population.
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It's estimated that a quarter of the UK's population will be aged 65 or older by 2050.
Suzy Morrissey, who has been commissioned to review the official retirement age, said she will look at the experience of other countries that already automatically link payments to life expectancy.
This is the case in Denmark, which recently raised its retirement age to 70.
The call for evidence will also look at the mechanisms used in countries such as Finland, Italy and the Netherlands.
Ms Morrissey said: "Most of us will expect to receive at least some state pension once we reach state pension age.
"The impact of decisions around state pension age are far-reaching. Therefore, I want to make sure I have heard views from a broad range of organisations, experts and individuals throughout the course of my review, including those who have an interest in the wider social and economic impacts of an ageing society."
Some experts have warned that automatic increases could create "chaos" in retirement plans.
Former pensions minister and partner at LCP, Sir Steve Webb, told The Telegraph that automatically linking life expectancy to the state pension age could have increased it by up to eight years.
"Having a completely automatic formula to move from changes in life expectancy to changes in state pension age could cause chaos for people's financial planning," he said.
"Every time the population projections are updated, this could move the dates for pension age changes by up to a decade, which would make it impossible for people to plan for their retirement finances."
Meanwhile research by Just Group found 62% of people retire before receiving the state pension, sometimes due to redundancy or ill health.
Therefore increasing the state pension age further could mean more people being forced to retire before they can receive the state pension.
Plus, the research showed more than 40% of current state pension recipients said the payments account for the majority of their income.
How does the state pension work?
AT the moment the current state pension is paid to both men and women from age 66 - but it's due to rise to 67 by 2028 and 68 by 2046.
The state pension is a recurring payment from the government most Brits start getting when they reach State Pension age.
But not everyone gets the same amount, and you are awarded depending on your National Insurance record.
For most pensioners, it forms only part of their retirement income, as they could have other pots from a workplace pension, earning and savings.
The new state pension is based on people's National Insurance records.
Workers must have 35 qualifying years of National Insurance to get the maximum amount of the new state pension.
You earn National Insurance qualifying years through work, or by getting credits, for instance when you are looking after children and claiming child benefit.
If you have gaps, you can top up your record by paying in voluntary National Insurance contributions.
To get the old, full basic state pension, you will need 30 years of contributions or credits.
You will need at least 10 years on your NI record to get any state pension.
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