Ahead of the State Pension Age (SPA) call for evidence closing on 24 October, the Standard Life Centre for the Future of Retirement highlights five key findings from its research on the human and economic implications of future changes to the State Pension Age.
1. One in four people aged 60-65 now live in poverty – 800,000 more than in 2010
The last State Pension Age increase between 2018 and 2020 pushed more 65-year-olds into poverty, creating financial hardship for many who were unable to work but too young to claim the State Pension, leaving them reliant on lower working-age benefits. The Centre’s Pre-retirement Poverty: Causes and Solutions (2024) found that one in four 60–65-year-olds now live in poverty – 800,000 more than in 2010 – with average incomes 16% lower than those aged 55–59. Accelerating the next planned rise to 68 would delay receipt of the State Pension for around three million people, exposing many of the same groups to further financial risk.*
2. 1.7 million people aged 60-64 are economically inactive – one in three, due to sickness or disability
Raising the State Pension Age may help reduce fiscal costs, but it cannot change the fact that two in five people (40%) in their early sixties are already out of the labour market. Of these, one in three (37%) cite long-term sickness or disability as their main reason for being out of work. This means many are unable to ‘work longer’ to bridge to a higher State Pension Age, forcing them to rely on lower benefits available to working-age people instead.**
3. 40% of 60-65 year olds have less than £3,000 in savings- yet could be asked to wait longer for the state pension
Millions approaching retirement also have little or no private savings to fall back on. 40% of 60-65 year olds have less than £3,000 in savings*. Additionally, Centre research from 2024 found that 35% of people aged 60–65 who are out of work and in poverty live in a household receiving a private pension but no state support, of these more than half – 20 per cent of the total have household savings of less than £16,000 – within the benefits eligibility threshold*. For those with minimal savings, any rise in SPA risks leaving them without an income bridge to retirement.
4. Workers forced out by ill health retire with less than a twentieth of the wealth of those who choose to stop working early
The Centre’s Beyond the Great Retirement (2023) report shows those 50-64 year olds who choose to retire early are much more likely to be wealthy than others, with a median total wealth of more than £1.2m This compares to a median figure of £750,000 for 50-64 year olds still in work, and just £57,000 for those who are economically inactive because of long-term sickness or disability*** This inequality means those least able to work longer are also least financially prepared to wait longer for the State Pension.
5. There’s an over 50s workforce exodus – every year 440,000 over-50s leave strategic sectors
Workers in their 50s and 60s are also vital to the UK’s Industrial Strategy growth sectors, yet hundreds of thousands leave the workforce each year. The Centre’s Counting on Experience (2025) found that 440,000 over-50s exit strategic sectors annually – including defence, advanced manufacturing and professional services – costing around £31 billion in lost output.***
Catherine Foot, Director of the Standard Life Centre for the Future of Retirement, said:
“Affordability will always be part of the debate about the State Pension Age, especially as our population continues to age. But the evidence shows that previous increases have already come at a significant human cost. A quarter of people in their early sixties now live in poverty, and many more are unable to work due to poor health or caring responsibilities. Millions have little or no private savings to fall back on, and those forced to leave work early through ill health have far less pension wealth than those able to retire by choice.
“Raising the State Pension Age may ease pressure on the public finances in the short term, but it risks deepening inequality and hardship for those least able to work for longer. The review must strike a fair balance between sustainability and support, recognising the realities people face and protecting the financial security of those approaching retirement.”
