The UK’s state pension age should be increased to 75, according to a report released over the weekend by the Centre for Social Justice (CSJ).

The think tank – set up in 2004 by the then-Conservative Party leader Iain Duncan Smith – made a series of recommendations for policy reforms to address the UK’s ageing society.

The proposed increase to the state pension age is a significant change from current UK government policy, adopted in 2014.

From December 2018, the state pension age for men and women has been rising from 65, and is scheduled to reach 66 in October 2020. It will then rise to 67 by 2028, and to 68 by 2046, although the latter is subject to review.

The CSJ proposed accelerating these increases, with the state pension age reaching 70 in 2028 and 75 by 2035, in order to keep the country’s old-age dependency ratio down and make its fiscal position more manageable. 

The group’s Ageing Confidently report warned that the UK was “not responding to the needs and potential of an ageing workforce”.

“The state pension scheme still operates within the age thresholds set for the [first] pension schemes over 100 years ago”

Centre for Social Justice

“As the population ages, working longer has the potential to preserve mental and physical health, to contribute to the economy and to significantly relieve fiscal pressures,” the report stated.

“Without a fundamental change in employment culture and an increase in opportunities for older workers, however, individuals, businesses and the economy will suffer.”

The CSJ added: “The state pension scheme still operates within the age thresholds set for the pioneer pension schemes over 100 years ago, revealing a disconnect between contemporary life expectancies and the state pension age. This raises the question of whether the state pension age is fit for the 21st century.”

However, Helen Morrissey, pension specialist at Royal London, warned that the proposal risked causing “huge issues” for retirees if they are not given enough time to prepare for the changes.

“We need to give careful thought to what kind of jobs people in their 70s are able to do, and while some people will be able to work on for longer others simply won’t be able to,” Morrissey said.

“These people will face severe financial hardship if they have not saved enough into a pension to cover the years between leaving work and claiming state pension. The government needs to think carefully before taking such drastic action.”

Joe Dabrowski, head of governance and investment at the Pensions and Lifetime Savings Association, tweeted that the CSJ’s retirement age plan was “an unbelievably bad idea”.

Other proposals

As well as raising the state pension age, the CSJ’s report proposed a government initiative to promote “the benefits of employing a diverse workforce” to employers, including advocating flexible working and flexible or gradual retirement.

It also supported the “Mid-Life MOT” concept, first launched by the Department for Work and Pensions in February. This was designed to help individuals assess their financial wellbeing and highlight where they could access guidance and support. ‘MOT’ is a reference to the UK’s annual test of the roadworthiness of vehicles.

The CSJ’s report is available here.

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