The State Pension Pension age will reach 70 by 2063 but will rise more slowly than the Government's Autumn Statement last week suggested, according to analysis by Towers Watson.
Work carried out by the company looking at new life expectancy assumptions published by the Office for National Statistics - and the Government's recently unveiled formula for increasing the State Pension Age indicates that:
- The State Pension Age will reach 68 in 2036 (starting to rise in 2034)
· Reaching 69 in 2049 (starting to rise in 2047); and
· Reaching 70 in 2063 (starting to rise in 2061).
These increases come slightly later, around one year for the increases to 68 and 69, than would have been expected based on the previous set of ONS life expectancy assumptions, says Towers.
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Last week, the Government announced new details of how it envisages that regular reviews of the State Pension Age will work.
Matthew Fletcher, a senior consultant at Towers Watson, said: "Putting the new ONS life expectancy assumptions into the Government's formula points to a slightly slower increase in the State Pension Age than was signalled in the Autumn Statement. This is not the final answer, though.
"Future State Pension Ages will be determined as much by pressures on the public finances and electoral considerations as by views about life expectancy.
"If future Governments do not like the answers that the ONS life expectancy numbers produce, a small tweak to the target retirement length will quickly solve the problem.
"To illustrate how easy this is, the State Pension Age is now expected to reach 68 in 2036 under the Government's target that people should spend 'up to one third' of their adult lives in receipt of State Pensions. If the target was one-third at all times, it would not reach 68 until 2049."
For people aged 65 in 2013, life expectancy estimates have barely changed – estimated now at 21.4 for men and 24.0 for women.