• New data suggests Brits are living longer – but increases in life expectancy are expected to be lower than previously thought
• For example, back in 2014 the ONS thought that by 2028 – when the state pension age will rise to 67 - the average life expectancy for a 67-year-old man would be 21.1 years, while for a woman it was expected to be 23.1 years
• However, the latest projections suggest that by 2028 the average life expectancy of a 67-year-old man is expected to be 18.7 years, while for a 67-year-old woman it is expected to be 20.8 years
• Downward revisions in expected life expectancy increases will inevitably heap pressure on the Government to rethink planned state pension age rises
• A Department for Work and Pensions review into the state pension age is expected to conclude next year
Tom Selby, head of retirement policy at AJ Bell, comments: “Although we are all still expected to live longer, today’s downward revisions in projected life expectancy improvements will almost certainly be seized upon by campaigners to pressure the Government into rethinking state pension age rises.
“Under current legislation, the state pension age is set to increase to 67 by 2028 and 68 by 2046. However, the previous Government stated its intention to bring forward the planned increase to age 68 to 2039.
“The current Government has also just kicked off a review into the state pension age, which is due to conclude in 2023.
“Given life expectancy is rising at a slower rate than previously thought, you could argue plans to increase the state pension age to 67 and 68 should be pushed further into the future - or even cancelled altogether.
“In fact, Labour’s 2019 manifesto explicitly called for the increase in the state pension age to 67 to be paused. When scandals over Downing Street parties are out of the headlines – and that could be a while at this rate - it would be no surprise to see the Opposition pushing hard on this issue.
“Indeed, given how difficult the Prime Minister in particular is finding life at the moment, it is not beyond the realms of possibility that the Government might consider rethinking state pension age rises to help shore up support among voters who might have become disillusioned in recent months.
“However, any rowing back on state pension age rises would likely meet fierce resistance from the Treasury, with the Chancellor nursing a huge financial black hole as a result of the pandemic and desperate to claw back any extra cash he can.”
