Office of Budget Responsibility projects future retirement age of 70

Future generations of UK employees will have to work until age 69 or 70 before they receive their state pension, according to a report by the Office for Budget Responsibility (OBR).

Retirement-2013

Its Fiscal sustainability report, which was presented to Parliament on 10 July, projects that state pension costs will increase from 5.5% of gross domestic product (GDP) in 2018-19 to 7.9% of GDP in 2063-64 as the population ages.

This will bring forward the rise in the state pension age to 68, and introduce rises to 69 and 70 within the next 50 years.

In its Autumn Statement in December 2013, the government brought forward the increase in the state pension age to 68 by the mid-2030s and to 69 by the late-2040s.

The report suggested that further tax increases or spending cuts are likely to be necessary following the current fiscal consolidation to help meet the needs of an ageing population.

It stated: “The government would end up having to spend more as a share of national income on age-related items, such as pensions and healthcare, but the same demographic trends would leave government revenues roughly stable.”