Hiking the state pension age to 70 is unavoidable over the coming years, a top think tank warned today.
The UK public finances are likely to buckle under the weight of the strain placed on them from having to fund Brits’ retirement packages, according to the International Longevity Centre (ILC).
The cost of funding the state pension has jumped three-fold since 2000 and now stands at £100bn a year.
However, the public coffers are unlikely to be able to fund the state pension if it continues on the same upward trajectory. As a result, the state pension age will have to rise to 70.
Top researchers at the ILC said: “Frankly, we’re probably going to have to increase SPA further between 2030 and 2045 for it to be intergenerationally fair and fiscally sustainable.”
Keeping the ratio of people in work to those at or above the state pension age constant would help alleviate the burden on the public finances, the ILC said.
However, under this policy, the state pension age would have to rise to 70 by 2040.
Under the government’s current plans, the state pension age will climb to 67 between 2026 and 2028.