Children born in 2012 are unlikely to receive their state pension until they reach 77 as a result of plans to increase the state pension age in line with longevity, PricewaterhouseCoopers said today.
The consultancy's projections of how the proposed change would impact on the state pension age show people aged 38 today having to work until 70, while those aged 13 in 2012 would have to work until 75 to receive the pension. For babies born in 2050, the state pension age is expected to have reached 84.
Last week's Queen’s Speech confirmed plans to increase the state pension age in line with longevity. It is already set to increase to 67 by 2028 and PwC predicts longevity-linked increases will mean it rises to 68 by 2031.
While the method to be used for the longevity-linked increase is expected to be published this summer, PwC based its projections on the rate the state pension age has already been accelerating and analysis of future life expectancies. It also took into account recent Office of National Statistics figures showing that one-third of babies born this year are expected to live to at least 100.
These projected increases in life expectancy mean that, while people will be working longer, they can still expect to spend as long in retirement - around 20 years on average.
PwC's head of pensions, Raj Mody, said the figures showed there would be increasing pressure on people to save more if they wanted to stop working before the state pension age.
'Many people born today face working from 17 to 77. Most people will want to stop working sooner but may not be able to afford to bridge the gap to the start of their state pension. The rising state pension age puts even more pressure on people to save.
'Even those people in middle age today whose state pension age might shift by a couple of years may want to start revising their plans now,' he added.