**Millions in the UK Could Work Until 74 as State Pension Warnings Mount**
Britain’s workers may need to remain in employment until their mid-70s if the government intends to keep its promise of raising the state pension by at least inflation, wages, or 2.5% – a system known as the ‘triple lock’. This is the stark finding of a new report from the Institute for Fiscal Studies (IFS), which has warned of significant financial pressures looming over the country’s pension system as the population continues to age.
For now, the state pension age is set at 66 for both men and women. However, as life expectancy rises and the UK’s demographic makeup evolves – with more older people and fewer younger workers – there are long-term concerns over the affordability of the state pension. Already, the government has signalled a gradual increase: the age is due to move to 67 between 2026 and 2028, before a further uplift to 68 sometime between 2044 and 2046. In light of the IFS’s latest modelling, some experts now believe that even more radical changes may be required.
Under current government policy, the triple lock commits to annual state pension uprating in line with the highest of wage growth, inflation, or a 2.5% increase. According to the IFS, maintaining this policy without also lifting the state pension age would become increasingly expensive – potentially costing taxpayers an extra £40 billion every year. The IFS has therefore suggested either raising the pension age significantly or moving to a less generous ‘double lock’, which would remove the 2.5% minimum guarantee.
Chancellor Rachel Reeves has reaffirmed Labour’s commitment to the triple lock, at least until 2029. Nevertheless, the IFS estimates that meeting the triple lock requirements sustainably would require pushing the state pension age to 69 by 2049 and as high as 74 by 2069. This would represent a dramatic increase from current retirement expectations, dramatically restructuring working lives for future generations.
Mike Ambery, Retirement Savings Director at Standard Life, suggested that the report accurately highlights major savings gaps and pensions disparities, particularly for the self-employed and younger generations not currently covered by automatic pension enrolment. He emphasised the importance of achieving a balanced approach: “There is not a one size fits all solution to these problems,” Ambery said. “We must be inclusive across different types of workers, carefully considering any changes in close consultation with employers and employees alike.”
One challenge highlighted by the IFS is that while some on low incomes may risk oversaving, most people on average or higher earnings are still not putting away enough for a comfortable retirement. The current review of pension adequacy, it argues, will need to weigh these issues carefully to avoid unintended consequences and ensure broadly fair outcomes.
State pension payments are a cornerstone of retirement income for millions across the UK. However, it is important to note that state pensions are distinct from any private or workplace pension arrangements. Individuals can check their own state pension age online, as well as obtain personalised forecasts for how much they might receive when the time comes to retire.
Currently, there are two versions of the state pension. Those born after April 1951 (men) or April 1953 (women) are entitled to the ‘new’ state pension, which pays up to £230.25 per week. Those born earlier receive the basic state pension, which currently stands at £176.45 per week. The amount each person receives is determined by their National Insurance contributions, with a full new state pension requiring at least 35 years of qualifying contributions, and a minimum 10 years for any entitlement at all.
The findings from the IFS have reignited a policy debate that has simmered for years in Whitehall and beyond. Balancing the affordability of the state pension system against the needs and expectations of an ageing population is a significant policy challenge – one which will likely become more urgent over the coming decades as the population continues to get older and healthier.
As policymakers consider potential reforms, the coming years could see further debate over whether to adjust the age people can claim the state pension, how increases are calculated, or both. For now, millions in the UK are being warned that the traditional notion of retiring in one’s 60s may become less achievable unless further changes are made or new funding solutions are found.