Britons warned UK state pension ‘will have to be lower and paid later’ as system ‘can’t cope’
editor2024-02-19T15:52:05+00:00UK state pension spending is projected to cost £125billion for 2023/24, according to the Office for Budget Responsibility (OBR)
Working-age Britons face getting a lower state pension and having to wait longer to get it because the current state pension system “can’t cope” with an ageing population, an expert has warned.
Chief executive of life insurer Phoenix Group Andy Briggs is urging Britons to prepare for the future now, as he warns dramatic reform could lie ahead.
“The state pension just can’t cope in the way that it was originally designed to do,” he told The Telegraph.
“Effectively, state pensions are going to have to be paid later and at a lower level, and people are going to have to make greater personal provision.”
The state pension was first introduced in 1948, with a state pension age of 65 for men and 60 for women.
Mr Briggs pointed out that at that stage, life expectancy for men was 67. He added: “So the whole thing was designed with a life expectancy in retirement of two years.”
The state pension age has since risen; it’s now 66 for men and women and hikes to 67 then 68 lie ahead.
The average life expectancy for someone aged 66 now is 85 years for a man and 87 for a woman.
Furthermore, the number of over 60s across the globe will double between now and 2050, the World Health Organisation (WHO) has warned.
Mr Briggs said it’s not likely the UK state pension age would be hiked by seven or eight years, which will cause “pressure” on the state pension.
He added: “Either that, or the tax rates for those working will have to go up quite materially.”
A think tank recently warned the UK and other ageing populations will need to hike their state pension age to 71 by 2050 in order to maintain the number of workers per retiree.
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