Review initiated for potential increase in retirement age for state pensions - might future adjustments be quicker?
UK Launches Third State Pension Age Review
The UK government has initiated the third State Pension Age Review, a six-yearly mandated exercise to assess the appropriateness of the current pension age rules in light of demographic changes. The announcement was made in July 2025, marking a crucial step towards securing a decent retirement income for the nation's citizens.
The review, as outlined by the Pensions Act 2014, will be guided by two independent reports. One will be led by Dr Suzy Morrissey, Deputy Director of the Pensions Policy Institute, while the other will come from the Government Actuary’s Department (GAD). The scope of the review is extensive, covering updated life expectancy projections, socioeconomic and demographic factors, and pension savings behaviour.
Life Expectancy and Pensionable Age
The GAD report will focus on whether the pensionable age allows a person to spend a reasonable proportion of their adult life in retirement. It will examine the latest life expectancy data to determine if adjustments to the state pension age are necessary.
Broadening the Scope
Dr Suzy Morrissey's report will delve into broader socioeconomic and demographic factors. It will recommend a framework for future pension age decisions, taking into account long-term demographic pressures, issues of pension adequacy, fairness, and risk distribution. Key factors under consideration include changes in life expectancy, economic impacts, pension savings behaviour, and inequalities related to gender, ethnicity, and household circumstances.
Potential Outcomes and Future Implications
The review may suggest adjustments to the state pension age, with policymakers balancing the sustainability of the pension system against fairness to current and future retirees. Potential outcomes could include recommendations to raise the state pension age, with some speculating that it could rise to 69 or even 70.
The review's findings and the government's response are due by 2029. This exercise coincides with the re-launch of the Pensions Commission, which will also address pension adequacy challenges facing future pensioners.
Impact on Savers and Stakeholders
Lily Megson-Harvey, policy director at My Pension Expert, has urged the State Pension Age Review to carefully consider the impact of raising the age further on millions of savers. She emphasises the need to help people engage with their pension options to ensure a secure retirement for all.
The review will also take into account the impact of previous changes to state pension age, fiscal costs, and the effects on current taxpayers and future pension recipients.
Notable Quotes
Kirsty Anderson, a retirement specialist at Quilter, has commented that an acceleration of the rise to age 68 must be justified with updated life expectancy data and a clear understanding of regional disparities. Damon Hopkins, head of DC workplace savings at Broadstone, calls the launch of the State Pension Age Review a "necessary step" and expects an acceleration in the increase of the state pension age.
Liz Kendall, work and pensions secretary, has stated that the review is necessary to ensure people have a decent income in retirement, especially for low-paid and self-employed individuals. The Women Against State Pension Inequality (Waspi) group, which has been campaigning about the impact of state pension age increases on women born in the 1950s, is also closely watching the review's progress.
Sources
- GOV.UK, Third State Pension age review announcement, July 21, 2025
- Travers Smith, State Pension age review details, August 1, 2025
- The Independent, overview of review and political context, July 24, 2025
- A O Shearman, Pension policy updates, July 28, 2025
- Sky News, announcement of review and pension commission, July 21, 2025
- The State Pension Age Review, initiated in July 2025, aims to ensure a decent retirement income for UK citizens, involving analysis of pension savings behavior and addressing issues of pension adequacy.
- Dr Suzy Morrissey's report, part of the State Pension Age Review, will explore broad socioeconomic and demographic factors, offering a framework for future pension age decisions considering gender, ethnicity, and household circumstances, among others.
- The Government Actuary’s Department report will focus on the reasonable proportion of adult life a person can spend in retirement, examining life expectancy data to ascertain whether adjustments to the state pension age are necessary.
- The review's findings, along with the government's response, will address both the sustainability of the pension system and fairness to current and future retirees, potentially suggesting an increase in the state pension age, which some speculate may rise to 69 or even 70, and will impact millions of savers.
