State pension 'in doubt' with Basic and Full rates at risk of shake-up
The state pension is in doubt with ONE IN FIVE people set to be eligible for the Department for Work and Pensions ( DWP ) rates by the 2030s. The state pension is in doubt as 1 in 5 look set to be eligible for payments by 2032 amid a population boom.
Data from the Office for National Statistics (ONS) found that the UK population will soar to 72.5 million over the next seven years. Based on these statistics, the number of people at state pension age is estimated to go up by 1.7 million between mid-2022 and mid-2032, with 13.7 million claiming payments by the end of the period.
This means that around 18.9 per cent of the population will be on the state pension or around one in five people. Andrew Oxdale from Fidelity International warned: "When the pension was introduced in 1909, it applied to people from age 70. But average life expectancy from birth was just 52.
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"Between 1951 and 2020, life expectancy increased by 10 years. It is projected to rise by another four years by 2070. While longer lifespans are something to celebrate, they come with additional state costs. The ‘triple lock’ is a further complication. It guarantees a minimum rise of 2.5 per cent each year or the higher of inflation or wages.
"As a result, State Pension payments have grown relatively quickly over the past decade. The bulge in Baby Boomers reaching retirement further increases the cost pressure. The Office for Budget Responsibility expects the cost of the state pension as a percentage of GDP to rise from 4.8 per cent to 8.1 per cent by 2071.
"The stated aim has been to keep it below six per cent a level it would breach somewhere in the late 2040s. The primary ways to mitigate this are either slower rises in the State Pension, which would involve watering down or abandoning the triple lock, or to increase the age of state pension eligibility."