The U.K. state pension age will rise to 68 at a faster pace than expected under new proposals by the Department for Work and Pensions.
The government published its final review into the state pension age Wednesday, and proposed a new timetable for the increase to 68 to "maintain fairness between generations in line with continuing increases in life expectancy," said a statement on the department's website.
The DWP said the latest projections from the Office for National Statistics show the number of people over the state pension age in the U.K. is expected to grow by a third to 16.9 million from 2017 to 2042.
The new proposal would see the state pension age increase to 68 from 2037 to 2039. Current legislation sees the increase taking place from 2044 to 2046. "Those affected by this proposed timetable will on average still receive more state pension over their lifetime than generations before them," the statement said.
"I want Britain to be the best country in the world in which to grow old, where everyone enjoys the dignity and security they deserve in retirement," said David Gauke, secretary of state for work and pensions, in the statement. "Since 1948, the state pension has been an important part of society, providing financial security to all in later life. As life expectancy continues to rise and the number of people in receipt of state pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations."
The proposal echoes that of John Cridland's review published in March. Mr. Cridland was appointed in March 2016 as the government's independent reviewer of the state pension age.
"This proposal will affect more than 7 million people in their late 30s and 40s — the sandwich generation," said Graham Vidler, director of external affairs at the Pensions and Lifetime Savings Association in response to the review. "This group are also those most at risk of inadequate private saving — they have not had the same access to final salary pension schemes as their parents and are too old to enjoy the full benefits of automatic enrollment that their children will see."
The PLSA has called on the government to follow up on another recommendation in Mr. Cridland's March review, which said access should be provided to "Midlife Financial MOTs," a type of personal analysis of their financial preparation for retirement. "This will help those people who need to work longer before they receive their state pension to make smarter financial choices to boost their savings," Mr. Vidler added.
The DWP review is available on its website. The next state pension age review will take place by July 2023, "which will confirm when state pension age will increase to 68, and will allow for consideration of more recent life expectancy projections whilst ensuring adequate notice," the review said.