Millions of Brits 'face working until 74' in new state pension warning
The state pension age is already set to rise to 68 in the coming decades, but it would need to reach 74 by 2069 to keep funding the triple lock promise, according to a new report
State pension age is gradually rising
(Image: GETTY )
According to a recent report by the Institute for Fiscal Studies (IFS), the UK state pension age would need to increase to 74 by 2069 in order to sustain the triple lock promise. The IFS warning comes amid concerns that an ageing population will render the government policy unaffordable. The state pension age, which is the earliest age at which individuals can claim their state pension, currently stands at 66 for both men and women, but is gradually rising to 68.
The triple lock guarantees that the state pension will rise every April by the highest of inflation, wages, or 2.5%. However, without adjustments to the state pension age, the IFS has cautioned that the triple lock will cost taxpayers up to £40 billion annually. As an alternative, the IFS has suggested a double lock, which would tie state pension increases to wages or inflation. Chancellor Rachel Reeves has committed to maintaining the triple lock until 2029.
The IFS report states: "Increases in the state pension age required to keep spending on the state pension below a certain level of national income would have to be substantial.", reports the Mirror.
"[Official] modelling shows that to keep public spending on the state pension below 6pc of national income while retaining the triple lock, the state pension age would have to rise to 69 by 2049 and 74 by 2069."
Mike Ambery, Retirement Savings Director at Standard Life, commented: "The report correctly identifies widespread under-saving and gaps in pension provision.
"We are supportive of their conclusion that there is not a one size fits all solution to these problems but there is a need to be more inclusive, particularly for the self-employed, as well as for younger workers who are not yet included.
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"The risk of over saving for those on low incomes is significant but so too is the need for most of those on average or higher earnings to save more.
"Striking the right balance will be a key challenge of the adequacy review, and any change would need to be carefully considered and in consultation, especially with employers."
The state pension age is already on track to rise to 67 between 2026 and 2028, with plans for it to climb further to 68 in the years between 2044 and 2046. Calls have been made in the past to accelerate the increase to age 68.
The state pension is distinct from any private or workplace pensions you might hold. One can verify their state pension age online and this also provides a state pension forecast, indicating how much you will receive upon reaching the state pension age.
There are two separate versions of the state pension, and eligibility depends on your date of birth. You're entitled to the new state pension if you're a male born on or after April 6, 1951, or a female born on or after April 6, 1953, which stands at a full rate of £230.25 per week.
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You're eligible for the basic state pension if you're a man born before April 6, 1951, or a woman born before April 6, 1953, with the full rate being £176.45 per week.
The sum you receive as state pension is contingent on your National Insurance record. To qualify for the full new state pension, you need 35 qualifying years on your National Insurance record, and typically ten years to receive any amount at all.
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