The Rise of State Pension Age

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The rise of State Pension Age

Introduction
The State Pension age (SPA) is the earliest age people can claim their State Pension. The Government has over the years passed three main legislations to increase the SPA. This essay will discuss the reasons behind the Government’s decision and explore the implications on individuals.

Rising SPA
The current State Pension ages (SPA) were set in 1948 at age 65 for men and age 60 for women. Complying with the European Court of Justice ruling that men and women must receive equal pension treatment, the Government legislated in the Pensions Act 1995 to increase women’s SPA to 65, with the change phased in over a ten-year period starting from 2010.

Under the Pensions Act 2007, the then equalised SPA will rise to 68 for both men and women in 3 steps: reaching 66 between 2024 and 2026, 67 between 2034 and 2036 and 68 between 2044 and 2046. This legislation was built on DWP’s proposals in its 2006 White Paper1, in which DWP raised concerns of the disproportionate life time people spend in retirement due to rising life expectancy and the cost implications. It stated that more people can reach the age of 65 and live longer. For example, a man aged 65 can be expected to live a further 20 years, comparing to 11 in 1950. Difference in the change of women’s longevity is even greater. Coupled with the trend that people on average retire earlier, the Government was forced to pay State Pension to more people for longer. Moreover, the ratio of pensioner population to working-age population was rising from 19% in 1950 to 27% in 2006 (estimated), as a result of the effects of decreasing birth rates. The Government concluded it was necessary by introducing this legislation to share more equitably the cost implications between those of working age and those of pension age.

More recently, the Pensions Act 2011 introduced to speed up the increase in women’s SPA so that it would have reached 65 by November 2018, and then both men...
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