Raising the state pension age will not help address concerns about retirement adequacy, the savings gap, or broader questions of fairness, the Society of Pension Professionals (SPP) has warned.
In its response to the government’s latest review of the state pension age, the SPP said that although raising the age threshold addresses the affordability of the state pension, it fails to tackle wider concerns.
In its official nine-page response, the SPP said that relying solely on this lever would imply that the state pension age could increase to 75 or beyond in the coming decades.
It added that this “would present significant political and social difficulties and would fundamentally alter retirement expectations”.
Shayala McRae, chair of the SPP’s legislation committee, said: “Reviewing the state pension age may appear to be a relatively straightforward decision, but in truth it is a complex challenge that has far-reaching implications for British society – political, social and of course, economic.
“Although the SPP believes the terms of reference for this review were unnecessarily narrow, we have sought to highlight a range of issues for consideration that we trust [will] prove useful in helping the government to reach the best possible decision.”
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The review is being carried out by Suzy Morrissey, deputy director of the Pensions Policy Institute. The closing date for evidence submissions is 24 October.
The idea of an automatic adjustment mechanism has been proposed, which would link the state pension age to factors such as life expectancy. While the SPP recognised that this would make changes more predictable and remove the need for political consent, the organisation said it would not eliminate political risk as there would still be pressure from affected groups to cancel or adjust any automatic change.
The SPP also suggested that policymakers should consider the issue of fairness, particularly in relation to people who leave the labour market earlier than average, have a lower life expectancy, or have a lower healthy life expectancy.
