Increases to the state pension age are set to save the government billions of pounds each year due to the fact almost 700,000 people will have to wait longer before benefitting, according to analysis undertaken by Aegon.
Around 670,000 people each year will now have to wait longer before benefitting, which could see the government save some £11bn a year in state pension payments. These savings may well be needed to fund the increased costs of NHS and social care funding as society ages, Aegon said.
The state pension age has been 65 for men since 1925 and became 65 for women earlier his month but, from December 2018, it will increased for both men and women to 66.
Aegon pensions director Steven Cameron said: “Hopefully these increases will not come as a shock and will have been communicated better than to the WASPI women who saw their state pension age increase by five or more years.”
Research from the Office for National Statistics has shown that, in 1931, males at age 65 might have expected to live for another 11.3 years on average and women for a further 13.1 years.
The equivalent figures for 2011 show that males who turned 65 in that year were expected to live on average for 18.32 years and women for a further 20.88 years, meaning state pensions are now paid for much longer than they used to be.
Cameron also explained that the 670,000 people who turn 65 in the next 12 months will be the first in almost 100 years to have to wait beyond the age of 65 to claim their state pension.
“While it will be of little consolation to those affected,” he added, “life expectancies have risen significantly.”