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02 Sep 2015

State pension age could reach 70 by 2050, says expert

A leading industry expert has warned that a drastic rise in the state pension age is “inevitable” in the face of enhanced life expectancy predictions, The Telegraph reports.

According to recently-released figures from the Office for National Statistics (ONS), life expectancy at birth has increased by around three years every decade, rising from age 51 for men born in 1910-1912, and 55 for women, to a respective 79 and 83 years old for those born in 2010-2012.

The findings come after the government pronounced a new formula for calculating the state pension age, so that members of future generations would spend “a third of their adult life in retirement.”

Using this formula, and as more UK citizens start to live well into their nineties, pensions consultancy Barnett Waddinghams has warned that “it is very likely that state pension ages will have to rise much faster than currently anticipated, almost inevitably reaching at least 70 by the midpoint of the century.”

“Longer working lives will surely become the norm for today´s younger generations, something they will have to accept in thinking ahead for retirement and how they are going to finance them,” added senior consultant Malcolm McLean.

Current government plans mean that the state pension is set to rise to 65 for men and women in three years´ time. By 2020 this will rise to 66, and by 2028 the state pension age will be 67. Women will not be able to retire earlier than men, as they can now.

There have also been suggestions about increasing the age to 68 as early as 2046, although this is said to be under review. McClean is now calling for a full-scale review of the state pension timetable, to avoid the pension age being increased indefinitely.

Copyright M2 Bespoke 2015

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