State Pension 'Catastrophe' Looms as Rule Change Threatens Retirement Security
A state pension "catastrophe" is looming, with experts warning that the government could condemn people to "years of living on the breadline" if it raises the state pension age amid plummeting healthy life expectancy. This dire prediction comes as both men and women are now expected to live in "good" health for less than 61 years, according to recent figures from the Office for National Statistics (ONS)—the lowest since records began.
Impending Retirement Age Increases and Health Concerns
The retirement age is already scheduled to increase to 67 in 2028 and 68 in 2046. However, the Labour Party government’s State Pension Age Commission is expected to recommend further increases when it reports next year. This move has sparked widespread concern, as it coincides with a significant drop in healthy life expectancy, creating a potential "chasm of ill health" for those forced to wait longer to retire.
According to the ONS’s latest data, men and women now expect to be in good general health for just 60.7 and 60.9 years, respectively. This decline raises alarms about the feasibility of working into older age without compromising well-being.
Expert Warnings and Public Response
Financial experts have voiced strong criticisms of the proposed changes. Stephen Perkins, managing director at Norwich-based Yellow Brick Mortgages, explained, "With the age at which you can draw a pension looking to go up and the healthy life expectancy going down, a poor retirement looks likely for most." He suggested that some workers might adopt a "work til I die" mentality, while others could seek to access their pension savings early to enjoy them while still healthy.
Antonia Medlicott, founder and managing director at London-based Investing Insiders, warned of an impending "catastrophe," highlighting that research from Pensions Age shows one in seven UK adults have never checked their pension. Nouran Moustafa, practice principal and independent financial adviser at Roxton Wealth, added, "Too many younger workers opt out or delay planning because retirement feels distant, and that behaviour compounds over time. A pension isn't a 'later problem', it's a lifetime asset."
Broader Implications and Calls for Action
Sir Steve Webb, a former pensions minister from the Liberal Democrats and Conservative Party coalition government, now with consultants LCP, cautioned that another increase in the state pension age could exacerbate health issues, creating a "chasm of ill health" as people wait longer to retire. This situation underscores the urgent need for better financial planning and policy adjustments to protect retirement security.
The combination of rising retirement ages and falling healthy life expectancy poses a severe threat to millions, urging both individuals and policymakers to address this growing crisis proactively.
