Chancellor says ‘it is right to look at the state pension age to ensure that the state pension is sustainable’ amid concerns of new rise
Rachel Reeves said the state pension age review is needed to ensure system is ‘affordable’ (Image: Getty)
Chancellor Rachel Reeves has said a review into raising the state pension age is needed to ensure the system is “sustainable and affordable”.
The Government review is due to report in March 2029 and Ms Reeves said it was “right” to look at the age at which people can receive the state pension as life expectancy increases.
The state pension age is currently 66, rising to 67 by 2028 and the Government is legally required to periodically review the age.
The Chancellor told reporters: “We have just commissioned a review of pensions adequacy, so whether people are saving enough for retirement, and also the state pension age.
“As life expectancy increases it is right to look at the state pension age to ensure that the state pension is sustainable and affordable for generations to come.
“That’s why we have asked a very experienced set of experts to look at all the evidence.”
The review was announced by the Department for Work and Pensions on Monday and will involve an independent report, led by Dr Suzy Morrissey, on specified factors relevant to the Review of State Pension Age along with the Government Actuary’s Department’s examination of the latest life expectancy projections data.
It comes as Ms Reeves is facing further pressure over the UK’s public finances after official figures showed higher-than-expected government borrowing last month due to soaring debt interest payments.
The Office for National Statistics (ONS) said June borrowing rose to £20.7 billion last month – £6.6 billion higher than a year earlier and the second highest June borrowing since records began, only behind that seen in 2020 at the height of the pandemic.
The ONS said interest payable on debt jumped to £16.4 billion due to a large rise in Retail Prices Index (RPI) inflation impacting index-linked government bonds.
June borrowing was higher than the £17.6 billion expected by most economists and the £17.1 billion forecast by Britain’s independent economic forecaster, the Office for Budget Responsibility (OBR).
Borrowing for the first three months of the financial year to date stood at £57.8 billion, £7.5 billion more than the same three-month period in 2024.
Richard Heys, acting chief economist at the ONS, said: “The rising costs of providing public services and a large rise this month in the interest payable on index-linked gilts pushed up overall spending more than the increases in income from taxes and national insurance contributions, causing borrowing to rise in June.”
