Pension age to be reviewed after warning ‘tomorrow's pensioners face being poorer than today's’

The government has announced a fresh review into the state pension age, with growing concerns that younger generations will be poorer in retirement than today’s pensioners.

The current retirement age is 66, rising to 67 within the next two years, and due to reach 68 by the mid-2040s. But this new review could see that increase brought forward, as the government responds to fresh warnings about the long-term affordability of pensions and falling living standards for retirees.

According to recent reports, people retiring in 2050 could be £800 a year worse off than current pensioners. It’s a gap that’s only expected to widen if action isn’t taken soon.

Why is the government reviewing the pension age?

Three new reports published this week show that 15 million working-age adults are currently under-saving for retirement. Many aren’t saving at all. The self-employed, low earners, women and people from some ethnic minority backgrounds are particularly at risk of an impoverished old age.

The Work and Pensions Secretary, Liz Kendall, has also announced the return of the Pensions Commission – a body that successfully overhauled the pension system in the 2000s by introducing automatic enrolment into workplace pensions. The commission will take a deeper look at pension savings and make longer-term recommendations in 2027.

Kendall warned: “Unless we act, tomorrow’s pensioners will be poorer than today’s.”

The review also reflects the growing financial pressure on the government to sustain the "triple lock" – the policy that guarantees annual increases in the state pension based on whichever is highest: inflation, average wage growth or 2.5%. The cost of this policy has already tripled beyond initial forecasts.

A retirement that feels out of reach

It’s not just a distant issue. Many people already approaching retirement are unsure how they’ll manage.

Women, in particular, are set to retire with significantly less. The average private pension income for women nearing retirement is just over £100 per week – half that of men in the same age group.

And for those in low-paid jobs, or who’ve had periods out of the workforce, retirement can feel financially uncertain.

But help is available.

Struggling in retirement? You might be entitled to support

If you're already retired or getting close to retirement and finding it hard to make ends meet, it could be you’re missing out on vital support.

Every year, an estimated £23bn in benefits goes unclaimed in the UK, according to Policy in Practice. That includes pension credit. A third of people entitled to pension credit don’t claim it. If you’re struggling, this benefit could top up your income and unlock other entitlements like free TV licences and housing benefit.

Don’t assume you won’t qualify. Even if you own your home or have some savings, you could still be eligible.

It only takes a few minutes to check what you’re entitled to using our free benefits checker, or if you’d like us to run through it with you, give us a call.

We can also help with budgeting and explain what your options are if you’re falling behind with bills and debt repayments. There may be more support available than you realised.