This Towers Watson analysis comes as the U.K. Conservatives confirmed that they would “hold a review to bring forward the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women”
Under existing legislation, the state pension age will be equalized at 65 for both men and women by 2020 and will then rise:
- from 65 to 66 between 2024 and 2026;
- from 66 to 67 between 2034 and 2036; and
- from 67 to 68 between 2044 and 2046.
When this timetable was announced in 2006, the British Government said that, following each rise in state pension age, men could on average expect to receive their state pensions for around 21 years and women for just under 24 years.
These estimates used the assumptions underpinning the latest official population projections available at the time, which have since been updated twice, the Towers report said.
If the latest projections proved correct, people retiring immediately after each rise in state pension age would on average receive their state pensions for between 1.7 years and 1.9 years longer than the government envisioned. People turning 66 in 2010 (women) and 2011 (men) are now expected to live for as long as the government thought people turning 66 in 2026 would do.
“The good news for the Conservatives is that the data the Government used to justify its plans now supports a faster rise in the state pension age,” John Ball, head of defined benefit pension consulting at Towers Watson, said in the report.
About four million more people who would currently be expected to claim state pensions from 65 would potentially see their state pension age increased under the Conservatives’ plans, Towers Watson said.