The UK Government’s second review of the State Pension age is due to be published before May. The latest review into the official age at which someone can retire, now 66 for both men and women, launched at the start of last year and is considering whether the rules around pensionable age are appropriate, based on the latest life expectancy data and other evidence.
State Pension age is regularly reviewed to make sure that it is affordable and fair as people are living longer and spending a greater proportion of their adult life in retirement than in previous years. Two further increases currently set out in legislation indicate a gradual rise to 67 for those born on or after April 5, 1960 and a rise to 68 between 2044 and 2046 for those born on or after April 5, 1977 - although this has been the subject of recent discussions as there are unconfirmed reports this may be be brought forward to the late 2030s.
However, senior pensions and retirement analyst at Hargreaves Lansdown, Helen Morrissey, warns that current lower birth rates could impact the age of retirement and the State Pension Triple Lock guarantee.
Ms Morrissey said that the birth rate combined with increasing longevity has huge consequences for State Pension policy.
In the immediate post-war era live births were well over 800,000 per year and there was also a large increase across Great Britain in the 1960s.
New data from the Office for National Statistics (ONS) and National Record of Scotland show there were 672,614 live births in Scotland, England and Wales in 2021. While that number is higher than the previous year, it is among the lowest figures since the early 2000s.
In Scotland, the 47,786 live births registered in 2021 is the second lowest annual total since records began in 1855.
The Triple Lock debate continues to rage in the UK as many people believe it is inter-generationally unfair which means the UK Government needs to make sure that decisions on how to manage State Pension costs are robust, fair and transparent for taxpayers now and in the future.
The State Pension Triple Lock is the guarantee which increases State Pensions by the highest between Consumer Price Inflation (CPI), earnings increases or 2.5% each year.
Ms Morrissey said: “The new birth rate data shows little evidence of the much talked about pandemic baby boom and alongside increasing longevity shows the fine line that needs to be tread on State Pension policy. Birth rates shift over time - we saw birth rates well in excess of 700,000 and even 800,000 per year in the 1960s and the post war era but the trend in recent years is downwards.
“With the number of older people continuing to rise there is a real imbalance when it comes to younger people in the workforce supporting a burgeoning ageing population and the sums don’t add up.
“The debate continues to rage around the Triple Lock and whether it’s the fairest way to uprate State Pension here in the UK and we await the findings of a government review into whether State Pension age will be hiked further and faster."
A new petition has been posted online urging the UK Government to 'Repeal the Triple Lock and reduce the State Pension rate to £125 a week'.
Created by James Nelson and posted on the official petitions-parliament website, it states: "The United Kingdom spends over 100 billion pounds a year on state pensions. By reducing spending on pensions this should allow the Government to reduce the tax burden or increase investment in areas of the budget that will boost the economy.
"We believe young people have been forgotten about by the Chancellor and forced to bear the burden of a ridiculous increase in pensions.
"We believe the Triple Lock is a disaster for the Budget and that the State Pension should be immediately reduced to £125 a week."
It concludes: "Other ways of calculating yearly pension increases should then be considered, that better balance the needs of pensioners with the cost of state pensions."
So far, the petition has received 16 signatures of support.
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