5 Year Review for State Pension Age

One of the important points that was overlooked by a lot of the commentary on the new single-tier state pension is that pensions minister Steve Webb has said that the state pension age will be reviewed every five years.

Introducing a White Paper on a single-tier state pension, the first of these reviews will take place in 2017, under the next government.

As life expectancy continues to increase, the main aim has to be to maintain the proportion of people's lives spent in retirement.

Under the current legislation, the state pension age is going to rise to 66 between 2018 and 2020 for both men and women.

As has been previously announced by the current government, the law will now be amended so that the state pension age increases further, to 67 between 2026 and 2028.

The state pension age is already scheduled under existing law to rise to 68 by 2046 under current legislation, this target will now be subsumed in the forthcoming five-yearly reviews.

The White Paper states:

"The government will carry out a review of the state pension age every five years, based around the principle that people should maintain a specific proportion of adult life receiving the state pension."

"This will be informed both by analysis of life expectancy projections by the Government Actuary's Department and by a report from an independently-led body on wider factors that should be taken into account when setting state pension age, such as variations in life expectancy."

The upshot of this is that further increases beyond 67 will not, as the government has previously suggested, be automatic if longevity rises.

Conceivably there could be a situation where there will be no further rises at all if life expectancy stops rising.