State pension age could be raised to 71 by Labour amid affordability concerns: 'Needs to be dealt with!'
The state pension age could be raised sooner than expected
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The state pension age could be raised to 71 under the new Labour Government amid concerns over the retirement benefit's affordability, analysts claim.
As it stands, Britons are able to access the Department for Work and Pensions (DWP) payments once they reach 66 but this is expected to change.
Currently, the state pension age threshold is legislated to rise to 67 by 2026-28 with a further hike to 68 expected by 2044-46.
Despite MPs having already voted on this timeline, an independent investigation is expected to look into when the state pension age will jump to 68.
A previous reviews recommended the rise to this should be in 2037-39 with a 2022 review suggesting a slower increase to 68 by 2041-43.
The same review floated an age rise to 69 in 2046-48.
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The full state pension could rise by around £517 a year if wage growth remains at 4.5 per cent GETTYWhile the last Government acknowledged the investigation's findings, a decision on the eventual age hike has been delayed.
Another review into the state pension age has been promised within two years of this new parliament.
Andrew Oxdale, the deputy head of communications at financial firm Fidelity International, outlined the various proposals to bring forward increases to the age threshold.
Notably, some analysts and economists have called on the state pension to be accessible from as high as 71.
Oxdale explained: "Various think-tanks have warned about the unaffordability of the State Pension.
"The latest came earlier this year from the International Longevity Centre. It suggested the state pension age would have to rise to 70 or 71 by 2050 to remain affordable.
"The ILC warned of ‘widening demographic imbalances’ that would heap pressure on Government finances.
"It also highlighted that younger people lack the savings and assets that their parents and grandparents had.
"In 2010, those under 40 held just £7.53 of every £100 of wealth. Over the past decade, this has fallen significantly to only £3.98, its analysis showed."
Based on analysis from the Office for Budget Responsibility (OBR), tHe cost of the State Pension as a percentage of gross domestic product (GDP) will go up from 4.8 per cent to 8.1 per cent by 2071.
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PAPrevious goals have sought to keep this percentage below six per cent which could be breached by the late 2040s.
However, analysts warn that the Labour Party has a difficult road to navigate between the ballooning cost of the state pension
"Retirement age changes are unavoidably emotive. It is surprising, in fact, that legislation in the UK has been passed to increase the age in recent decades with little backlash.," Oxdale added.
"Consider, for instance, the violent pensions protests that have repeatedly erupted in France and the Russian demonstrations of 2018. The reason this issue may return to the headlines in the UK in the coming months is because a decision to accelerate the rises was delayed ahead of the election but will need to be dealt with imminently."
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