Will State Pension Age Have to Increase to 80?

There was an interesting article in the Financial Times today (link at the bottom of the page) arguing that Britain would have to raise its state pension age to 80 in order to limit payments to the same percentage back when the state pension was introduced in 1908.

The analysis was carried out by Longevitas (the life-expectancy think-tank). The basis of the study is the observation that :

"the odds of a 20-year-old male in 1908 living until age 70 – the original age for pension benefits – were only a little better than one in three"

whereas

"By 2009, the odds of a 20-year-old living to age 70 had risen to four out of five – yet the State Pension Age (SPA) has fallen to 65, with an increase to 67 due by 2020."

There is plenty of discussion about the full report in the original article, however one of the most interesting observations is that back in 1909 the original state pension was not just means tested, but also character tested (i.e. those of dubious moral character could not qualify).

Are we heading toward a situation where the state pension in the UK will become means tested again (perhaps character testing is more of a stretch!).

Source:

FT.com - Study points to state pension age of 80