The state pension age could soon rise to 70 (Image: Getty)
People could soon have to wait until their 70s to claim their , experts have warned.
The costs of the policy will jump up again in April as payments increase 4.1% in line with the metric, raising the question of when the rules will have to change to keep it affordable.
Aaron Peak, personal finance expert with credit score platform , warned that raising the age is “almost inevitable” as the bill for the taxpayer increases.
The age is already set to go up, increasing from the current 66 to 67 in stages between 2026 and 2028.
It will go up again from 67 to 68 between 2044 and 2046. There have previously been reports that the Government may bring forward this timetable.
Looking at the possibility of extending the age even further, Mr Peak said: “If pension costs keep rising, we could see talk of pushing the age to 70 by the 2050s or 2060s.
“However, this will be a tough sell politically, especially for those in physically demanding jobs.”
He also thinks there will be other changes to the : “The has been a lifeline for retirees, but it’s becoming harder to sustain.
“If wages and inflation keep rising sharply, the Government may need to rethink the policy within the next decade, either by tweaking the formula or setting a cap on annual increases.”
Another expert warning that people could soon have to wait until their 70s to collect their is , personal finance expert at UK.
She said: “To ensure the UK’s pension system is sustainable, we could see the age increase to 70 or older during the next two decades.”
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She also said that the increases in the access age could be brought in “at a faster rate than planned” as the Government struggles to cover the rising bill.
But this could prove unpopular with many people. Ms Knight said: “While it makes sense to delay the statutory retirement age as people live longer, previous increases in the UK and in other countries have been met with concern and anger from workers, who feel they do not have time to adjust their financial strategies and may be forced to effectively ‘unretire’.”
The full new is currently £221.20 a week, and this will go up to £230.25 a week with the 4.1% increase from April.
Another concern is that the Government to make the yearly increases to payments last generous.
Kevin Hollister, founder of , said of the : “It makes no economic sense and seems merely a political decision.”
Suggesting an alternative model, he said: “Increases would be much better to be linked to one factor, inflation plus real economic growth. That would mean workers and pensioners both benefit from economic growth, whilst protecting them from inflation.”
Explaining how this would work if the economy was stagnant, he said: “If real growth is negative the pension would reduce in real terms as it would be below inflation. This is likely to mirror workers salaries, who are ultimately the ones paying for any increases through taxation.”
Another pensions expert suggested an alternative for the . Steven Cameron, pensions director at Aegon, explained: “Pensioners would receive an inflation increase as a minimum, and if over the previous three years wage growth has on average been higher than inflation, they’d get an extra uplift.
“This avoids widely fluctuating outcomes at times when both inflation and earnings growth are unpredictable, smoothing things out but ensuring pensioners still share in sustained increases in the nation’s wealth.”