State pensioners in the UK may face the prospect of working well beyond the traditional retirement age, potentially until 80, as part of major reforms being considered by the Department for Work and Pensions (DWP). Experts warn that what was once seen as retirement “the pot of gold at the end of the rainbow” is now slipping further out of reach for many.
Currently, the state pension age is scheduled to rise from 66 to 67 next year, and is projected to hit 68 by 2046. However, consultancy Barnett Waddingham’s analysis suggests workers in the 2070s could be compelled to delay claiming their state pension until 80 or face significantly increased National Insurance contributions—up to 50% more.
Stuart McDonald, partner at consultancy LCP, highlights the growing disconnect between life expectancy and pension age. “Life expectancy in the UK for young adults rose by 17 years during the 20th century, but the state pension age did not increase at all,” he explained. This gap has led to historically long retirements that are increasingly financially unsustainable.
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To address this, LCP recommends a gradual increase to the pension age by one year every decade, to keep retirement periods manageable and protect the system’s fiscal health.
Political voices are also weighing in. Former Liberal Democrat business secretary Sir Vince Cable criticized the current triple lock system, calling it “unsustainable” and suggesting that a substantial tax increase may be inevitable to support future pensions.
These debates come ahead of a nearly 5% increase in DWP payments next year under the Labour government, which is committed to maintaining the triple lock pledge. As the government faces mounting pressure to reform pension policy, working longer before retirement may soon become the new reality for many.