The introduction of a regular independent review of longevity to manage automatically future changes in the state pension age could see younger people waiting until after age 75 before getting a state pension, say experts.
Standard Life says if the 5.3 years increase in male life expectancy at age 65 achieved over the last 30 years is repeated, someone born in 1970 could retire at 71. This is because the state pension age would rise by another 5 years on top of the 1 year increase to age 66 due to take effect by 2020. By 2071, assuming the same rate of mortality improvement continues, the state pension age will have risen to 77. So, young adults born in 1994 who are aged 17 today may face up to 61 years of work, says Standard.
John Lawson, head of pensions policy at Standard Life says: “We will look back on those who retired at 60 after a 40-year working life as the most fortunate generation in history. Their fathers and mothers had long working lives of over 50 years, and it looks likely that their children will also face much longer working lives than is the norm today.
“We all need to take control of our finances and plan accordingly if we want to enjoy both our working lives and time after work.”
Joseph Lu, longevity expert at Legal & General says: “Projections from the UK Office of National Statistics, for example, show that the proportion of people within the UK who are 65 years and older is projected to grow from 17 per cent in 2011 to 25 per cent by 2052.
“In addition, once we get to retirement age we’ve been living longer. Retirees in the UK at aged 65 have seen their life expectancy increase by more than two years over the last decade and we expect people at retirement age to continue to live longer.”