Raising the State Pension Age to 68 Is the Most Honest Thing Any Government Could Do

Britain's dependency ratio — the number of pensioners per working-age adult — is heading in one direction. In 1950, there were roughly 5.5 workers for every pensioner. By 2020, that had fallen to about 3.3. ONS projections put it below 2.5 by the mid-2040s.

The state pension costs roughly £124 billion a year, making it the single largest item of government expenditure. The triple lock — guaranteeing rises by the highest of inflation, average earnings, or 2.5% — means this cost accelerates faster than the economy grows. In 2024/25, the triple lock delivered a 8.5% increase. The full new state pension rose to £230.25 per week.

Every year we delay adjusting the pension age, the gap between contributions and payouts widens. This isn't ideology. It's arithmetic.

Consider what this means for the Treasury. State pension spending has roughly doubled in real terms since 2000, from about £60 billion to £124 billion. The OBR projects further growth as the baby boomer generation enters retirement in full force over the next decade.

For those planning their own retirement income, our pensions hub explains how workplace and personal pensions interact with the state pension.

When Beveridge designed the welfare state in 1942, the state pension age was 65 for men and 60 for women. Average life expectancy at birth was around 63 for men — most didn't even reach pension age. The system was designed as insurance against an unusually long life, not as a universal 20-year retirement income.

Today, life expectancy at birth is 78.6 years for men and 82.6 for women. At age 65, men can expect to live to 83.3 and women to 85.8. That's 17-20 years of state pension payments per person.

The 2014 Pensions Act built in a regular review mechanism precisely because Parliament recognised that pension age must track longevity. The principle is sound: roughly one-third of adult life should be spent in retirement. At current life expectancies, that points to a pension age of 68-69, not 66.

Every rich democracy is making similar adjustments. Denmark links pension age directly to life expectancy projections. The Netherlands is moving to 67. Australia to 67. Pretending Britain can avoid this while maintaining a triple-locked pension is fantasy economics.

Critics of raising the pension age rarely spell out what they'd do instead. There are only four options:

1. Raise the pension age — the approach on the table
2. Cut pension payments — politically suicidal and devastating for the poorest pensioners
3. Raise taxes — National Insurance is already 8% for employees, 15% for employers after the April 2025 employer NI rise
4. Borrow more — with gilt yields above 4% and national debt at roughly 100% of GDP, this stores up an even bigger problem

Option 1 is the least harmful. A 68-year-old in 2037 will have grown up with better healthcare, better nutrition, and more desk-based work than previous generations. The proportion of over-65s in employment has already doubled since 2000, from roughly 5% to over 10%. For our pensions hub, the trend is clear: people are working longer voluntarily.

Raising the pension age to 68 by 2037-39 saves the Treasury an estimated £7-10 billion per year compared with the current 2044-46 timetable. That's money that could fund better social care for those genuinely too ill to work.

The recent drawdown vs annuity debate shows how much retirement planning has evolved. Workers approaching 68 in 2037 will have had automatic enrolment workplace pensions for over 20 years. Their private pots will be materially larger than any previous generation's.

The strongest objection is that not everyone sits at a desk. Builders, carers, warehouse workers, and cleaners can't simply work until 68. This is a real problem — but it's an argument for better disability benefits and earlier-access pathways, not for keeping the entire pension age artificially low.

The ONS healthy life expectancy data shows that men in the South East have a healthy life expectancy of 65.5 years, while men in the North East manage just 59.1 years. That 6.4-year gap is a scandal — but the solution is tackling health inequalities, not subsidising a universal pension age that most people don't need.

A sensible system would combine a higher default pension age with a hardship route for those whose health genuinely prevents them working beyond 65. We already have Employment and Support Allowance and Universal Credit for those unable to work. What we lack is a coherent bridge between these systems and the state pension.

The data is stark: men in the North East have disability-free life expectancy of just 56.9 years. Any policy that raises the pension age must include bridging support for these workers. But the right response is targeted support — like Denmark's early retirement scheme for those with 42+ years of contributions — not a blanket refusal to adjust the age for everyone.

Here's the point nobody wants to make: keeping the pension age at 66 is a wealth transfer from young to old. Today's 25-year-olds are paying record National Insurance contributions to fund pensions for a generation that benefited from final salary schemes, house price inflation, and free university education.

The average 65-year-old has net wealth of roughly £300,000. The average 30-year-old has roughly £15,000. Yet the tax system transfers billions annually from the latter to the former. The triple lock has increased the state pension by 46% since 2010 — far outstripping both wage growth and inflation over the same period.

Raising the state pension age to 68 is one small step toward rebalancing this. It asks the healthiest, longest-lived generation in British history to work two more years — two years during which they'll continue building workplace pension pots that previous generations never had access to. For more on how pension contributions compound, see our pensions guide.

Those who want to maximise their pension contributions before the tax year ends should review our guide on pension carry forward rules. If you're weighing pension against ISA contributions, see our analysis of the pension vs ISA trade-off.