“The state pension age has remained largely stagnant for decades. Today’s announcement means it is catching up with years of increasing life expectancy, even if recent indications suggests that growth has slowed.
“Government deserve some credit for biting the bullet and taking the unpopular decision to increase the State Pension age. However, it appears they were not convinced that more creative solutions were administratively viable. The ‘universal’ State Pension age we currently operate under means that retirement age applies equally to everyone. While it is possible to delay retirement and take a higher pension in exchange, the same flexibility does not exist in reverse.
“Government might have looked at a system that allowed for flexibility in the State Pension by allowing people to take a smaller State Pension at a younger age. But they may have decided that such a system is too complex to operate.
“Today’s announcements are interesting in the context of the decision to maintain the triple lock, which causes the state pension to ratchet up ahead of inflation and earnings. The Conservatives had planned to end the triple lock, but conceded it in their negotiations with the DUP. So on the one hand they are maintaining state pension increases for today’s retirees, while at the same time telling people age 47 and under that they will have to work longer before receiving their state pension.
“The key message here is that the government is taking a gradually declining role in supporting retirement income. A combination of increases in life expectancy, and the growing number of retirees relative to the working age population, means that individuals will have to save harder for their own retirement.”