The Centre for Social Justice study suggests today's schoolchildren might not access their state pension until age 75, representing a substantial leap from the current eligibility age of 66. The report indicates the government may need to tighten qualifying criteria for the benefit, as falling birth rates and increasing life expectancy put a growing strain on the DWP pensions system. Whether the government will actually implement this suggestion remains unknown.
Already, the qualifying age is set to rise soon, increasing gradually from April 2026 to reach 67 by April 2028. Legislation has also been enacted for a further phased increase from 67 to 68, presently scheduled for between 2044 and 2046. The qualifying rules for the state pension are changing soon, though what specific measures the government might take beyond these age increases is unclear.
Meanwhile, the auto-enrolment system introduced in 2012 requires workers to pay a minimum of 8 per cent of their salary into a workplace pension, typically including a 5 per cent contribution from the employee and a 3 per cent contribution from the employer. Auto-enrolment contribution rates were designed to provide minimum retirement incomes when added to the state pension, but it would not be able to replace the state pension as a primary source without a significant increase in contribution rates and sufficient time for those higher rates to build sufficient pension wealth. A significant proportion of working-age adults still aren't saving enough, even with the current state pension, though how many people are currently not saving enough is unknown.