One age group of Brits set for main blow by Andy Burnham as 2035 deadline looms

Andy Burnham’s Labour government has been urged to raise the UK state pension age to 70 by 2035, as part of recommendations to the Second Pensions Commission to tackle fiscal sustainability

Andy Burnham is facing calls to raise the state pension age to 70 by 2035 from a leading think tank. The new Labour Party Prime Minister and his Chancellor John Healey have been pressed to take action following a fresh report.

The Intergenerational Foundation’s proposals, released in response to the Second Pensions Commission Interim Report, recommend pushing the state pension age up to 70 by 2035.

The think tank has previously championed lifting the State Pension age to 70 by 2035, with an automatic adjustment mechanism linked to life expectancy kicking in afterwards.

Increasing the SPA would help slow the growth in the old-age dependency ratio, which would also ease the financial burden on working-age earnings. Primary legislation has already established that the SPA will climb to 67 between 2026–2028 and to 68 between 2044–46, but life expectancy gains continue to exceed the rise, the report cautions.

The report states: “The Government Actuary’s Department 2020 Quinquennial Report suggests that finds that the current trajectory is not fiscally sustainable in isolation, and will require more rapid increases in the SPA, increased NICs receipts or Treasury Grants. In order to maintain the fiscal sustainability of the State Pension, the current review should consider raising the SPA faster than currently legislated.”, reports Birmingham Live.

The report cautioned: “Raise the State Pension age and introduce a clear automatic adjustment mechanism linked to life expectancy. IF has previously argued that the Government should consider increasing the State Pension age to 70 by 2035, before moving to a two-thirds longevity link thereafter.”

The state pension age (SPA) is set to be gradually raised once more, climbing from today’s 66 up to 67 by early 2028. This impacts individuals born on or after 6 April 1960. Meanwhile, an independent assessment of the state pension age is presently ongoing, examining the framework for SPA rises beyond 67.

The Institute for Fiscal Studies is similarly supporting an increase, stating: “In coming years, there is a good case for legislating for further increases in the SPA beyond 68, as part of the response to rising life expectancy and the resulting public finance pressures.

“These pressures are significant. Even assuming the SPA rising to 69 in the early 2070s, the Office for Budget Responsibility forecasts that state pension spending would rise to close to 8% of GDP by that point, up from around 5% of GDP today.”