According to research examining the impact of increasing life expectancy and declining birth rates on state pensions, middle-aged workers in the UK may need to work until they are 71 before becoming eligible for pensions, as reported by The Guardian.
Current plans anticipate the retirement age rising to 67 between 2026 and 2028, and to 68 by 2044. However, experts argue that this isn’t sufficient, especially with a significant portion of the workforce leaving before pension age due to avoidable health issues.
Les Mayhew, an expert in statistics and demographics, suggests that to maintain the current ratio of workers to pensioners, the retirement age may need to be raised even further. Factors such as preventable ill health further compound the need for a higher retirement age.
The financial implications of an ageing population are significant, with pensioner benefits projected to cost the government billions annually. While some advocate for raising the retirement age as a solution, others caution that it could disproportionately affect poorer individuals and argue for a more holistic approach to addressing fiscal pressures, including healthcare and social care funding.
The Intergenerational Foundation stresses the need for a fair distribution of the financial burden, suggesting that older generations, who have benefited from state support, should contribute more towards their own retirement through measures like a wealth tax. However, Andrew Scott, co-author of the 100-Year Life, advocates for a focus on preventive healthcare across all age groups rather than solely relying on raising the retirement age.
Critics warn against raising the retirement age without proper support for workers with health issues, which could exacerbate existing inequalities. The government acknowledges the need for a sustainable pension system and highlights investments in employment support and healthcare services to address these challenges. A spokesperson said:
“We have committed £70m in employment and skills support for the over-50s, which has seen an extra 54,000 over-50s added to company payrolls. Our £2.5bn Back to Work plan is supporting people to stay fit and find work, in addition to £14.1bn to improve health services to help people live longer, healthier lives.”
First published on 7th February 2024.