The increase in the state pension age to 68 is likely to come forward from the current date of 2046 to the mid 2030s, and increase further to 69 by the late 2040s.
The Chancellor says this, along with action this government has already taken on the state pension age, could save around £500 billion from pension expenditure over the next 50 years.
The Government says changes to the state pension age will be considered as part of future reviews, which will take account of the latest demographic data available at the time and be informed by an independently led report on wider factors.
The DWP has published a formula for calculating state pension age based on the principle that it should be received for a third of adult life.
BlackRock head of UK retail Tony Stenning says: “In our recent survey, BlackRock found that nearly half (49 per cent) of 25-34 year old Brits are concerned they’ll outlive their savings in retirement and while they may be dismayed by today’s news, this age group has an opportunity to use their longer working life to save a comfortable nest egg for older age. “However, Brits do have a certain amount of retirement realism these days, largely attributable to rising living costs and lack of preparation and almost a third of people in Britain (29 per cent) believe they will never fully retire, but a staggering one in two (53 per cent) have not begun saving for retirement.”
The increase in state retirement age will drive demand for health management services from employers says Axa PPP healthcare.
Axa PPP Healthcare health services division managing director Chris Jessop says: “The government’s decision to increase retirement age even further and to bring this forward to the mid 2030s will certainly have a knock-on effect for UK businesses. As the workforce starts to include more and more older workers, companies will need to be more proactive in their approach to managing the health of their employees if they want to maximise their productivity and performance, and reduce the risk of health related absence. It is well documented that many people currently in their 40s and 50s who, through poor lifestyle habits around diet and exercise, will face serious health problems as they age.
“Businesses can no longer operate in isolation from the health issues that are now prevalent in our society. Doing nothing is no longer an option and companies of all sizes must be increasingly proactive in helping employees manage health problems or in reducing the risk of issues associated with areas such as mental illness or lifestyle disease. This does not mean being intrusive or aggressive in employees’ lives but rather taking a proactive approach in a supportive way to ensure employees manage their health and wellbeing better as they age, helping them fulfil their potential and extend their working lives.”