Every couple of years, the state pension is reviewed by the Government with one due to take place in early 2023. Once the retirement threshold is raised, people have to wait longer for payments and the benefits linked to the state pension. Experts are reminding young savers that the state pension could be increased to 70 by the time they reach retirement.
Currently, the retirement age threshold is 66 years old but the Government has confirmed this will rise in the near future.
By 2028, the age at which someone gets support from the Government in retirement is set to reach 67 under existing proposals.
Increases are based on life expectancy data in the UK and are carried out to help the Government save money.
However, older Britons in need of financial support are losing out on state pension payments they may otherwise have been entitled to due to these hikes.
READ MORE: Pension triple lock ‘needs reform’ for ‘means-tested’ payments
Tom Selby, the head of retirement policy at AJ Bell, broke down when the state pension age would likely reach 70 years old.
He explained: “Prime Minister Rishi Sunak and his chancellor risk being caught between the devil and the deep blue sea when it comes to state pension age increases.
“A dramatic acceleration of existing plans would risk electoral oblivion, while pushing back planned rises could cost the Exchequer tens of billions of pounds.
“Maintaining the current proportion of the population living up to and beyond state pension age would require an increase in the state pension age to 68 by 2034, 69 by 2038 and 70 by 2042, according to the International Longevity Centre, a highly respected think-tank.”
The finance expert also highlighted the financial cost that would come from delaying the pending increase to the state pension age.
Mr Selby added: “On-the-other-hand, ensuring one third of adult life is spent in receipt of the state pension would push back the planned increase to age 67 to 2040 – but cost the Treasury billions of pounds.
“Given these challenges, the easiest move both politically and fiscally may be to stick to the existing timetable.”
Plans to raise the state pension age further will be outlined in the next few months but some experts believe since life expectancy improvements have stalled so should further increases to the age threshold.
READ MORE: Waspi women wait for compensation verdict as ‘cruel’ rumours fly
However, Mr Selby believes younger savers in Britain should “prepare” for the reality of not being able to access their state pension until they turn 70.
The pension expert said: “But those downward shifts in life expectancy projections, in part a result of the pandemic, come after decades of rapidly rising longevity.
“During that period, the state pension age of women has risen by six years – mostly to make it equal with the men’s state pension age – while for men it has risen by just one year.
“In reality, younger savers need to prepare for a world where the state provides less of their retirement income than it has done historically.
“Indeed, it would not be surprising if those in their 20s and 30s today have to wait until their 70th birthday or beyond to receive the state pension.”
As it stands, the new state pension is £185.15 a week with claimants getting a yearly amount of £9,628.
Recipients of the basic state pension, which means they reached the state pension age before April 2016, are on £141.85 a week.
In April 2023, the state pension will be raised by 10.1 percent which will see payments exceed £10,000 annually for the first time.