Another year older – what will happen to the state pension age in 2023?

Renewed concerns around the state pension’s future

The rumour mill has been going full throttle as speculation increases around the Government’s review of the state pension age. I’ve read journalists writing that they see no reason not to be able to continue working well into their 70s, with perhaps unsurprising responses to their articles coming from those employed in more physically demanding roles.   

Meanwhile headlines and bylines last year also had an air of mentally preparing the nation for change.  From “State pension age set to rise to 68 in Treasury ‘big bazooka’ cash grab” (The Telegraph) to “Even if the so-called triple lock on pensions survives, there are stealthier ways that government austerity might erode your nest egg.” (Bloomberg) this is creating a rising tide of expectation that increases in the state pension age will be brought forward.  But how do we ensure fairness is at the heart of decision making, alongside the inevitable framing of financial necessity?
 

Sustainability of the state pension

So whatever the headline announcement about the State Pension age, we must also be looking for the Government’s position on a number of key questions, including whether;

1. It remains right for there to be a fixed proportion of adult life that people should expect, on average, to spend over State Pension age.   
2. It is reasonable to give people a fixed period of notice for State Pension changes, and if so, how long.
3. There are options for taking account of differences in circumstances when setting the State Pension age in the future?

These questions cut straight to key issues of intergenerational fairness, including what is the purpose of the State Pension, who benefits the most and who loses out?  And will importantly provide the guiderails for the long-term shape and sustainability of the State Pension for many years to come.
 

Do the public know enough about the state pension?

We have been engaging the public to help us understand the factors they believe are important in shaping the State Pension to be fit longer lives and the 21st century.  Whilst the research, being led by The Policy Institute at King’s College London is still in train, we have found equal levels of surprise and frustration from people about their lack of knowledge about the State Pension. 

The people we have engaged have overwhelmingly welcomed and embraced having the information and time to deliberate thoughtfully on issues around the future of the state pension, thinking about their own circumstances and wider context of fairness, affordability and sustainability. This has included whether someone’s age remains an appropriate marker for eligibility, particularly in the context of widely differing life expectancy. 

Whilst the Government gave a firm ‘no’ to a petition calling for the lowering of the State Pension age to 60, which was debated in Parliament in December, it does highlight public demand for more debate on the value of and eligibility for the state pension.

It is clear to me that with or without changes to the State Pension age, people need and want more information more regularly on the State Pension to help them prepare for the future.  If you want to contribute your thoughts or know more, please get in touch.