How high could the UK state pension age go

Denmark is on course to have the highest retirement age in Europe, after passing a new law that will see the state pension age rise to 70 by 2040.

It extends a long-standing policy of linking retirement to life expectancy – a model that has triggered growing debate across Europe.

Under the legislation, anyone born after 31 December 1970 will be affected, with phased increases taking the retirement age to 68 by 2030 and 69 by 2035.

But the policy has not been without controversy. Social Democrat Prime Minister Mette Frederiksen had previously questioned the fairness of automatic rises, warning that “you can’t just keep saying that people have to work a year longer”.

Here, The i Paper explores how Denmark’s bold move could reshape the retirement landscape – and whether the UK might follow suit.

What are current plans to raise the state pension age?

The UK state pension age is currently 66 for both men and women.

Between 2026 and 2028, it is scheduled to increase gradually to 67, affecting those born on or after 6 April 1960.

It is then set to rise to 68 between 2044 and 2046, affecting those born on or after 5 April 1977.

Could the state pension age go even higher?

Speculation around raising the state pension age usually centres on whether the planned increase to 68 will be brought forward.

Jason Hollands, managing director of wealth management firm Evelyn Partners, said that the earliest this could happen was by 2035, given governments generally commit to giving 10 years’ notice of changes.

“It seems improbable anything will be announced in the near future,” he added.

The debate has cooled recently due to a plateau in life expectancy and the general election, during which no major party supported raising the pension age, he added.

Still, the issue must be addressed, he said, describing it as “a nettle that must soon be grasped one way or another”.

Mr Hollands believes it is “almost inevitable” the changes will be brought forward – so the retirement age is brought to 68 before the mid-2040s – driven by longer life expectancy, medical advances, and demographic and fiscal pressures.

Former pensions minister Ros Altmann told The i Paper direct comparisons with the state pension ages in the UK and Denmark are not entirely fair.

Denmark’s system includes a supplemented basic pension, an element means testing, and early retirement options.

She said: “The UK has no such flexibility and those not well enough to work till the ever-rising state pension starting age and without private pensions or other savings are just plunged into penury and must rely on meagre state working age benefits which are even less than our low state pension.”

What would need to happen for it to stay lower?

In the recent past, the Labour Party has been highly critical of even increasing the state pension age from 65 to 66. It has made the case for stopping at 66 because of inequalities in life expectancy around the country.

But that was before the party entered power, Sir Steve Webb, former pensions minister and partner at LCP, said.

He explained that there were three factors that could slow down an increase in the state pension age.

The first is the 10-year commitment, which means a Government that increases the pension age gets all the “political flak” for an increase but no extra revenue to use in the current parliament, he said.

The second is that if efforts to reduce working-age economic inactivity were successful, this would increase the tax base needed to fund pensions.

Thirdly, if the cost of the pension were reduced in some other way – for example, breaking the triple lock or tightening eligibility rules – it would give more scope to keep the state pension age where it is.

Sir Steve said: “Pension ages are rising across the developed world as countries come to terms with the combination of people living longer and fertility rates dropping, meaning there will be fewer workers in future to fund pension costs.

“The state pension age has proved to be a hot political topic, and there is little incentive for today’s politicians to announce aggressive future increases when the additional revenue will not come on stream for many years.

“There are also legitimate concerns about the wide differences in life expectancy around the UK, which means that an across-the-board increase in pension age has a particularly hard impact on more deprived areas.”

The Department for Work and Pensions has been contacted for comment.