State pension age review risks overlooking 'most pressing issue'

Another review of the state pension age is underway but an expert has said there is another more worrying issue that needs addressing. The third state pension age review will look at topics including the benefits of linking the state pension age to life expectancy and the role of the state pension age in keeping the state pension sustainable for the Government.

Mark Pemberthy, benefits consulting leader at consultancy firm Gallagher, said he expects the review will focus on fairness, which is an important question as life expectancy varies across the UK, meaning some people will get their state pension for longer than others.

But he pointed to another vital question that needs to be addressed. He said: "This is all before we even consider the most pressing issue. Working people are generally not saving enough for an enjoyable retirement.

"The Pension Commission also has an important part to play over the next few years in ensuring that we all save enough for an adequate retirement income." The full new state pension currently pays £230.25 a week, or £11,973, though most claimants get less than this.

Data from Pensions UK suggests that even for a minimum standard of living in retirement you need more than this. For a basic retirement, you need £13,400 a year as a single person or £21,600 a year for couples.

If you want a moderate standard of living, you need £31,700 a year as a single person or £43,900 as a couple. The state pension age is currently 66 for both men and women.

This will be increasing in stages to 67, between April 2026 and April 2028. There are also plans to increase it again to 68 between 2044 and 2046.

Another question for the future of the state pension policy is the long-term viability of the triple lock. This guarantees state pension rates increase each April, in line with either 2.5%, the rise in average earnings or inflation.

But with large increases in recent years, experts fear the policy will soon become unaffordable and the Government will have to make the pay increases less generous.