The state pension age is currently 66, but further increases to 67 and 68 are already planned. Recent reports have even suggested age changes could be accelerated to rise to 68 by the “late 2030s” as Britons await the results of a review for further clarity.
Rising life expectancy is often considered as a motivating factor for state pension age changes, but a recent drop has led some to question this.
Express.co.uk spoke exclusively to Stuart Price, partner and actuary at Quantum Advisory, who weighed in on the debate.
Mr Price said: “Over the last 10 to 15 years, life expectancy has been improving and improving, but we have seen over recent years more of a levelling out – and now even coming down a bit as well.
“There are a number of reasons around this, and one of the big thoughts is the stress on the NHS and peoples’ lifestyles.
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“Life expectancy is reducing but not by a drastic amount. So, the Government might say this is just a short term blip, and eventually it might go back up again.”
However, while this is an important factor to consider, experts are also looking at the widening gap in terms of life expectancy between the most and least deprived areas.
For example, the average life expectancy in the North East is 77 for a man and 81 for a woman. The gap between most and least deprived quintiles is 10.4 years for a man and 8.1 for a woman, according to the Office for Health Improvements and Disparities.
But in the South West, average life expectancy is 80 for a man and 83.8 for a woman. The gap between most and least deprived quintiles is 6.3 and 4.7 years respectively.
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With life expectancy massively varying depending on where one lives, and how much wealth they have, some have previously suggested this must be taken into account when it comes to the state pension age.
In its announcement of the second state pension age review, the Government said the review would consider “differences across countries and regions”, as well as “the effects for individuals with different characteristics and opportunities, including those at risk of disadvantage”.
Mr Price continued: “Postcode mortality analysis is important to look at, and it’s something we consider within the industry as well.
“There is a huge variance between life expectancies depending on where you live, and where you live is usually based on your lifestyle.
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“If you’re from an affluent area, you’re perhaps eating better, and have the disposable income to go to the gym. You might not be drinking or smoking as much, and you could also have access to private healthcare.
“All these things equate to a generally better life expectancy within those areas, but the widening gap is especially noticeable.”
Despite this, Mr Price said it would be “very difficult” for the Government to enforce different state pension ages according to varying regions across the country.
Mr Price explained: “If that were to be implemented, people could work against the policy and move to certain areas in the hopes of getting a lower state pension age.
“It’s hard as to whether or not people in deprived areas should get a state pension earlier, just because their life expectancy is lower.
“Would you have to live in a certain area for a set number of years before you became entitled to a lower state pension age? This would be difficult to work.
“But there is an argument for these individuals to perhaps apply for additional benefits.
“At the end of the day, though, the state pension age has to be universal to avoid claims of unfairness.”
However, the expert concluded by arguing while life expectancy is important to consider, it may not be a main motivator for the Government at present.
Instead, Mr Price stated affordability and longevity are likely to be the key issues the Government takes into account in its review.
A DWP spokesperson recently told Express.co.uk: “No decision has been taken on changes to the state pension age.
“The Government is required by law to regularly review the state pension age and the second state pension age review is currently considering, based on a wide range of evidence including latest life expectancy data and two independent reports, whether the rules around state pension age remain appropriate. The review will be published early this year.”
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