Holding back the years: the new State Pension Age dilemma

The government has nearly finished its review of the next stage of State Pension Age (SPA) increases. But changes to life expectancy figures pose a significant, and potentially expensive, dilemma.


A review of State Pension ages from the Department for Work and Pensions (DWP) back in March 2017 stirred initial controversy. The report by John Cridland proposed that the move to an SPA of 68 should be phased in between 2037 and 2039. That was seven years earlier than had been legislated for in the Pensions Act 2007.

Cridland’s idea was a political hot potato, not least because there was then – as there still is now – considerable controversy about the acceleration of women’s SPA to 65 by November 2018 and to 66 less than two years later. In the month after Cridland’s report, Theresa May called a general election for early June. Unsurprisingly, in May 2017, the DWP announced that no decision would be made on fresh changes to the SPA until after a new government was formed. Fast forward two months and that newly installed government revealed it would accept Cridland’s recommendations but would not legislate them until after a further SPA review had been carried out.

It has taken until now for that process to come to fruition. Shortly before last Christmas, the DWP kicked off the promised SPA review by commissioning two independent reports. The government looks as if it will once again find itself in an awkward position. Cridland’s report was based on Office for National Statistics (ONS) data that said that a man aged 68 in 2039 could expect to live for 21.3 years and a woman for 23.2 years. However, in January 2022, when the ONS published its latest projections, the corresponding figures were 18.8 years and 20.8 years. The decline of about two and a half years has nothing to do with Covid-19, rather it reflects that life expectancy has not improved as fast as was previously expected.

Using those latest ONS figures suggests that for a 68-year-old to have the same life expectancy in retirement as Cridland predicted, the SPA should move to 68 around 2069 – a 30-year postponement of the original proposal. From the Treasury’s viewpoint, that would mean 30 years of starting to pay pensions from 67 instead of 68. The cost would run into many billions.

To sort out your retirement plans, come to us. 

The value of your investment and any income from it can go down as well as up and you may not get back the full amount you invested.

Important Information

This document is marketing material. This document is provided by the author and may not necessarily represent views expressed in other Aspect8 communications, strategies or funds. The material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. The material is not intended to provide and should not be relied on for accounting, legal or tax advice, or investment recommendations. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amounts originally invested. Exchange rate changes may cause the value of any overseas investments to rise or fall. The sectors, securities, regions and countries shown above are for illustrative purposes only and are not to be considered a recommendation to buy or sell. All investments involve risks including the risk of possible loss of principal. Information herein is believed to be reliable but Aspect8 does not warrant its completeness or accuracy. Reliance should not be placed on the views and information in this document when taking individual investment and/or strategic decisions. Some information quoted was obtained from external sources we consider to be reliable. No responsibility can be accepted for errors of fact obtained from third parties, and this data may change with market conditions. This does not exclude any duty or liability that Aspect8 has to its customers under any regulatory system. MSCI: Third party data is owned or licensed by the data provider and may not be reproduced or extracted and used for any other purposes without the data provider’s consent. Third party data is provided without any warranties of any kind. The data provider and issuer of the document shall have no liability in connection with the third party data. FTSE: FTSE International Limited (‘FTSE’) © FTSE 2019. ‘FTSE®’ is a trade mark of London Stock Exchange Plc and The Financial Times Limited and is used by FTSE International Limited under licence. All rights in the FTSE indices and or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent. Regions/sectors shown for illustrative purposes only and should not be viewed as a recommendation to buy/sell. This content is issued by Aspect8 Limited, Holmwood House, Broadlands Business Campus, Langhurstwood Road, Horsham, West Sussex, RH12 4QP. Registered No. 07572431. Authorised and regulated by the Financial Conduct Authority.


Benchmark Financial Planning is an Appointed Representative of Best Practice IFA Group Limited which is authorised and regulated by the Financial Conduct Authority, the registration number is 223112. Registered office: Broadlands Business Campus, Langhurst Wood Road, Horsham, West Sussex, RH12 4QP. Registered in England and Wales No 07572431.

The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren't able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk

The guidance and/or advice contained within this website are subject to the UK regulatory regime and are therefore targeted at consumers based in the UK.