When George Osborne used his Autumn Statement to announce a new formula linking state pension age with life expectancy – bringing forward an already planned pension age rise by a decade – the news was filled with eye-catching headlines about working until the age of 70.
It was an attempt to draw a line under a persistent issue: how to pay for a pension bill that is only going to grow. But legislation that stretches so far beyond the current parliament will always be on shaky ground. And with the free market Institute for Economic Affairs (IEA) already calling for the move to later retirement ages to be accelerated, can we really plan for retirement with any certainty?
How long will you have to work?
The formula introduced in the autumn statement is an attempt to relieve politicians of the responsibility of raising the state pension age – always an unpopular move – and put it in the hands of demographers and accountants.
Under the formula, those currently aged 59 and under will retire at 65-66 depending on birthday. Those under 52 will retire at 67. People in their mid-40s will retire at 68, and those in their mid-30s at 69. And of course, the headline rate: people currently in their 20s are projected to retire at 70 – the biblical life expectancy of three score and ten years.