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Retirees could lose upwards of £46,000 each if the state pension age rises to 70 as is feared.
With the state pension triple lock pledge adding increasing pressure to the Government budget, some experts have suggested raising the age at which people can claim their state pension could help sustain the annual uprating.
By honouring the triple lock, the state pension rises every year by the highest of three measurements: inflation, wage growth, or 2.5 percent.
Figures from the Office for Budget Responsibility (OBR) show the state pension cost £110.5billion in 2022/2023. This figure is forecast to grow to a staggering £124billion for the 2023/2024 tax year.
At present, Britons can start claiming the state pension benefit when they reach the age of 66, and this is expected to rise to 67 between 2026 and 2028.
The state pension age is then set to rise to 68 between 2044 and 2046. However, some experts have suggested the age would need to be raised to 70 before 2040 to prevent the system from collapsing, GB News reports.
Rachel Lacey from interactive investor said: “Although previous governments have rejected recommendations from these reviews, calls are once again mounting to speed up the rate of increase.
“The London School of Economics, for example, recently published a report recommending that the increase to 68 takes place as soon as possible. Similarly, the International Longevity Centre (ILC) has said that to maintain the existing ratio of workers to pensioners, the state pension age would need to reach 70 by 2040 – a rate of increase that is much faster than the current schedule.”
Without factoring in future triple lock increases, the current full new state pension is worth up to £11,502 per year.
By adding a further four years to the state pension age, people could lose as much as £46,000 of their state pension packet, as they would lose at least £11,500 per year for each of those years.
For the time being, the state pension age timeline will remain unchanged, and the Government remains committed to provide 10 years’ notice of any age change increases.