An increase in the state pension age is ‘inevitable’, after new data showed the population aged 90 years and over continued to grow in 2018, a pensions expert has warned.
Figures published today by the Office for National Statistics showed there was an increase of 0.7 per cent in the number of people aged 90 years and over, from 579,776 in 2017 to 584,024 in 2018.
This hike was mainly due the number of men aged 90 years and over, which rose 2.8 per cent when compared to the previous year.
The age at which individuals can claim their state pension is set to rise to 66 by 2020, 67 between 2026 and 2028, and 68 between 2044 and 2046.
In August, the Centre for Social Justice - a think tank chaired by Iain Duncan Smith MP, former secretary of state for Work and Pensions – proposed to increase the state pension age to 75 by 2035, in a move to tackle the challenges posed by an ageing society to the UK’s fiscal balance.
Malcolm McLean, senior consultant at Barnett Waddingham, believes the data proves that the state pension age will need to increase further.
He said: “In his closing speech to the Labour party conference yesterday [September 24], Jeremy Corbyn assured delegates that under Labour no-one would ever be required to stay in work to age 75 – although he gave no indication as to where he stood on existing government proposed increases to the state pension age over time to 68.
“Although all politicians may insist they have no plans to increase the state pension age, much beyond the present level, it seems inevitable on cost and affordability grounds, with a continuing ageing population, that further increases will be necessary.
“If not to the age of 75 then probably to 70 at least by the mid-point of the century.”
The figures published today by ONS also have implications when planning for later life, argued Steven Cameron, pensions director at Aegon.
He said: “One in five males and one in three females born in 2016 to 2018 are likely to celebrate their 90th birthday.
“A longer life requires more money to make the most of it. For those using their pension pot to generate an income throughout their retirement, there’s now a very real prospect of needing to plan for an income to last well into your 90s.
“With more people already reaching 90 and the expectation of this continuing to increase, there’s also a greater likelihood of requiring social care in your later years, and this needs to be paid for.
“And these figures may also prompt some people to rethink their planned retirement age, which may be why an increasing number of us are choosing to work beyond traditional retirement ages, often taking a transitional approach to retirement by gradually reducing the number of hours worked in the run up to stopping work altogether.”
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