Pension expert advises that the State Pension age must increase
23 October 2019
In an opinion that will no doubt be met unfavourably by the majority of people, a pensions industry expert has admonished that the state pension age must increase as a result of the ageing population of the UK and ever-increasing life expectancy.
Stuart Price is the Partner and Actuary at Quantum Advisory, a specialist pensions company. He says that his concerns are based on the fact that the State Pension is largely funded by current National Insurance contributions, yet the Office for National Statistics (ONS) confirmed that in less than 30 years, nearly a quarter of UK citizens will be aged 65+. The system works for the moment but costs the government approximately £100 billion a year which is taken from the National Insurance Fund (NIF).
He also raised concerns about the ‘triple-lock’, which maintains that the state pension will increase by the greatest of three figures - inflation, average earnings or 2.5% in the year. This worked initially when it was introduced as it was designed to mitigate pensioner poverty but with the State Pension poised to increase by 3.9%, it could be argued that the ‘triple-lock’ could cause huge deficits in funding the scheme.
Speaking to Wales247, Price offers three solutions to the issue of increasing State Pension rates, “the amount of state pension will have to reduce; there needs to be an increase in taxes or NI contributions to provide additional funds to pay the state pension; and the age at which you can collect your state pension needs to increase beyond the planned 68.”
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