State Pension  

DWP looks at life expectancy link to state pension age

DWP looks at life expectancy link to state pension age

The Government Actuary’s Department has been commissioned to look at using projected life expectancy to inform the first state pension age review.

It will examine whether those reaching state pension age can expect to spend specified proportions of adult life in receipt of the state pension based on the current timetable.

Pensions minister Richard Harrington said: “As set out in the Pensions Act 2014, the report from the Government Actuary complements John Cridland’s independent report on State Pension age, announced in March, and both will inform the government’s first review of State Pension age.

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“People are living and working longer than ever before, that is why it is important we get this right to ensure the system stays fair and sustainable for generations to come.”

The government has committed to reviewing the State Pension age every six years, with the first of these currently under way.

Carried out by Mr Cridland, the first review is due to report back by May 2017.

The Gad review will consider two scenarios, based on adult life starting at 20, to inform its report, using future life expectancy projections.

One will be people spending 33.3 per cent of their adult life in receipt of the state pension in the future, which reflects the experiences of those reaching state pension age over the past decade.

The other will be people spending 32 per cent of their adult life in receipt of the state pension in the future, which reflects the experiences of those reaching state pension age over the last 20 years.

The Department for Work and Pensions published an interim report into the Cridland review last month.

It floated the possibility of replacing a universal state pension age with a "tailored" one, in a move to balance the challenges of increasing longevity with the need for fairness.