State pension age alert as thousands more to live to 100 – do you face working for longer?

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STATE PENSION age could rise further as the number of people set to reach 100 is set to increase.

State pension age is currently 66, but with an ageing population, changes could be on the horizon. A study has shown the number of people in the UK set to be aged 100 or more will grow.

In 2021, it has been recorded as 16,000, but by 2041, the number is expected to reach 29,000.

This would be a 78 percent increase, Bowmore Wealth Group has said.

An increasingly ageing population is likely to have an impact on when people can retire, and thus the state pension age.

At present, the state pension age is currently under review to determine when rises will be implemented.

State pension age is currently 66, with two further increases set out in legislation – first to 67, and then a gradual rise to 68.

The review is taking place due to the fact people are, on average, living longer, much like the Bowmore study suggests.

The Government has said it needs to ensure “decisions on how to manage its costs are robust, fair and transparent” for taxpayers both now and in the future.

It added: “It must also ensure that as the population becomes older, the state pension continues to provide the foundation for retirement planning and financial security.”

Currently, the rise to 68 is scheduled between 2044 and 2046 for those born on or after April 1977.

However, the review is considering whether this rise should be brought forward to 2037 to 2039.

If implemented, the acceleration would have a wide spread impact for millions of people and their retirement plans.

The ageing population matter highlighted by the Bowmore study will have knock on effects according to experts.

Helen Thomas, financial planner at Financial Planning Corporation, told the FT: “There has been a lot of talk of raising the state pension age further.

“This means that people would either have to work for longer or save a lot more into pensions and other investments to provide cash-flow at their desired retirement age.”

The state pension age review must be published by May 7, 2023, with further clarity provided at this date.

It is to consider a wide range of evidence, including the implications of the latest life expectancy data.

The review is also set to offer a balanced assessment of costs when it comes to an ageing population alongside future state pension expenditure.

Different countries and regions, including Northern Ireland, will be taken into account before a final decision is made.

There will also be a consideration to different characteristics and opportunities.

“The Government is required by law to regularly review the state pension age. 

“We recently launched the second state pension age review, which will consider whether the rules around state pension age are appropriate, based on a wide range of evidence including latest life expectancy data, and two independent reports.”

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