Raising the state pension age to 71 would “penalise those most in need”, a retirement expert has warned.
Kate Smith, the head of Pensions at Aegon, said the proposal of increasing the state pension age to 70+ by 2050 would be “concerning for millions”.
She warned: “Pushing back the state pension age to age 71 would be a shock for many – when they are expecting to receive this from age 67 or 68. Some will only receive it for a short time, others not at all.”
The International Longevity Centre has warned its analysis suggests Britain will need to increase the threshold to 71 by 2050 to maintain the number of workers per retiree.
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The state pension age could be raised to 71 under a new proposal
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As it stands, the state pension age will increase to 67 between May 2026 and March 2028 and rise to 68 from 2044, under current plans.
However, the centre’s report highlighted that those born after April 1970 may need to work until 71 if they are to claim their full retirement entitlement.
Based on Aegon’s Second 50 research, more than 95 per cent expected to rely on the state pension later in life.
Miss Smith added: “This report, published in an election year, highlights the need for the political parties to detail their plans for state pensions ahead of the UK general election.
“This is too important an issue to be kicked into the long grass. People need to know where they stand and what this means for their later life, giving them plenty of time to adjust their working and savings plans.”
The retirement expert described the proposal as a “blunt instrument” which will more likely “penalise those most in need”.
As it stands, the new state pension is paid at weekly rate of £203.85 which will rise to £221 from April.
In comparison, the basic state pension comes to £156.20 a week but will jump to a payment rate of £169.50 in two months’ time.
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The majority of Brits expect to be rely on their state pension to live on in later life
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Under the triple lock, state pension payment rates will be increased by 8.5 per cent, while other benefits will go up by 6.7 per cent.
Concerns have been raised over the long-term viability of the triple lock which is the metric used to determine payment rate hikes every year.
State pension payments are raised based on either inflation, average earnings or 2.5 per cent; whichever is higher.
The affordability of the triple lock has been questioned but experts are also urging the Government to reconsider drastic hikes to the pension age.