In July 2025, the government launched its third statutory review of the State Pension age (SPa), as required under the Pensions Act 2014, and this could have significant implications.
The review will assess whether the current SPa increases remain appropriate, considering updated life expectancy data, fiscal pressures and generational fairness.
The review arrives at a critical time, with the next legislated increase in SPa from 66 to 67 taking place between 2026 and 2028.
Although a future rise to 68 is currently legislated for between 2044 to 2046, this third review may recommend bringing that increase forward to an earlier date.
The review comprises two key reports. The first is an independent report led by Dr Suzy Morrissey, deputy director of the Pensions Policy Institute and former adviser to the New Zealand Retirement Commission. Her report will provide a framework for future decisions on SPa, drawing on international comparisons and evidence across the UK.
The second report comes from the Government Actuary’s Department (GAD), which will examine whether individuals retiring within specified future periods are likely to spend a consistent proportion of their adult lives in retirement. This will help determine if the SPa remains aligned with longevity trends.
The financial sustainability of the State Pension system is the main concern. The State Pension is the Treasury’s single largest welfare expenditure, comprising over 80% of the £175bn annual pensioner welfare bill. Without intervention, this cost is projected to rise from 5.2% to nearly 8% of GDP over the next 50 years.
Given these pressures, policymakers are re-evaluating not just the pace of future SPa increases but the underlying principles for determining those changes.
In the last review in 2023, Baroness Neville-Rolfe recommended bringing forward the rise to age 68 to between 2041 and 2043. The then-Conservative government did not commit to this, possibly because of political sensitivity and upcoming elections. However, the new Labour government may now revisit this recommendation to demonstrate a commitment to long-term fiscal responsibility.
Indeed, the Adam Smith Institute (ASI) has updated its model for calculating when the state pension could become fiscally unsustainable. It found that the point at which the state will be spending more on welfare payouts than it will be receiving in National Insurance contributions is as close as 2036.
The ASI said that, despite government measures such as raising employers' National Insurance contributions from April 2025, their latest prediction is only one year later than its previous estimate calculated last year.
Maxwell Marlow, director of public affairs at the ASI, said: “If the Government is serious about securing Britain’s finances, it must suspend the Triple Lock immediately and move towards a system that is honest about the challenge posed by an ageing population.”
Dr Morrissey’s independent report will look at:
- Whether SPa should be explicitly linked to changes in life expectancy
- The impact of current and potential SPa frameworks on intergenerational equity; and
- Lessons from international models, particularly automatic adjustment mechanisms (AAMs), which revise retirement ages based on demographic and economic indicators.
Her report will weigh these factors to suggest a sustainable and equitable path forward, supported by evidence, impact assessments, and stakeholder input. Importantly, it will also assume that current entitlements and benefit levels remain unchanged. In parallel, the GAD will assess whether the proportion of adult life spent in retirement remains consistent with past benchmarks and expectations.
Its calculations will be based on ONS 2022 cohort life expectancy projections and will assess historic proportions for several periods (1992–2016, 2004–2024, and 1992–2024) and then project forward from 2030 to 2072.
This evidence base will inform whether the SPa rise to 68 in 2044 to 2046, as legislated in the Pensions Act 2007, remains viable, or whether a revised schedule is needed.
If the desired proportion of retirement life is projected to be exceeded within the next two years, the GAD model proposes a two-year phased SPa increase.
There are several implications for Financial Advisers and Paraplanners:
- Accelerated SPa increases are likely: Given demographic pressures and fiscal constraints, the acceleration of the rise to 68 - possibly to 2041 to 2043 – is under active consideration. Further rises beyond 68 may also be explored, particularly if longevity improvements rebound after recent slowdowns.
- Review Frameworks may shift: The use of fixed percentages of adult life in retirement as an SPa benchmark may lead to a more dynamic system in the future, particularly if the UK adopts mechanisms akin to international AAMs.
- The future of the Triple Lock is in question: While this review focuses on SPa, policymakers may also consider the viability of maintaining the triple lock, as part of a broader effort to manage state pension expenditure.
- Client Communication and Retirement Planning: Advisers should proactively communicate with clients - especially those born after 1961 - about the potential for revised retirement timelines. Expectations around retirement age and income should remain flexible in financial plans.
- Inter-generational Equity: The review will pay close attention to fairness across generations, which may influence not only SPa policy, but also broader pension reform. Advisers and Paraplanners may need to consider how different cohorts are impacted, particularly younger clients who may face longer working lives or changes to state support.
- Long-Term Planning Horizons: With GAD extending their projections to 2072, Advisers and Paraplanners should monitor the final review outcomes closely, to align long-term models with realistic assumptions around SPa and related benefits.
- Regional Variation Considerations: The review will include data divided up into separate regions and nations. Any divergences in regional impacts may prompt policy adjustments, or the segmentation of advice, depending on client location.
In terms of a timeline, there is no confirmed deadline for publication, but findings from both reports will be submitted to the Secretary of State for Work and Pensions in time to inform the next policy cycle. The timing and form of any changes will be decided by the Secretary of State, and final implementation would be subject to legislation.
Advisers and Paraplanners should watch closely for announcements in late 2025 or early 2026, when decisions are expected to be made, based on the evidence gathered.
The current legislated increase to age 67 remains on track for 2026 to 2028.
The third SPa review reinforces the government’s intention to align retirement policy with long-term demographic and fiscal realities. While no immediate changes have been legislated beyond 2028, a faster transition to and SPa of 68 is probable, and future dynamic adjustments may become the norm.
Advisers and Paraplanners should factor these trends into client retirement strategies and stay alert to further reform across, both SPa and State Pension value frameworks.
James Jones-Tinsley is a technical specialist at Barnett Waddingham on SSAS and SIPPs practice areas. He also presents to clients, advisers and other professionals on pension matters, liaising with the media on changes to pension legislation. James D Jones-Tinsley FPMI APFS, This email address is being protected from spambots. You need JavaScript enabled to view it.