The government has launched a review into the state pension age, looking at the factors it should consider relating to state pension age and the proportion of adult life currently spent in retirement.

News of the review was announced alongside the relaunch of the Pensions Commission, which the government has ‘revived’ as part of its work to explore adequacy issues and undersaving concerns.

Marking the third review of the state pension age, the review is required as part of the government’s obligations under the Pensions Act 2014, which requires the government to review state pension age every six years.

As part of this review, the GAD will be preparing a report for the Secretary of State for Work and Pensions looking at the proportion of adult life in retirement.

The GAD will look at whether the rules about pensionable age mean that, on average, a person who reaches pensionable age within a specified period can be expected to spend a specified proportion of their adult life in retirement.

The government has also shared the terms of reference for this work, confirming that the report will include commentary on trends in life expectancy data, an assessment of current legislative timings for the rise to 68, and sensitivity analysis.

Alongside the GAD’s report, the DWP has appointed Dr Suzy Morrissey to prepare recommendations on a framework to allow the Secretary of State to consider future state pension age arrangements in the light of the long-term demographic pressures the country faces.

Morrissey, who is the Pensions Policy Institute (PPI) deputy director and former advisor for the New Zealand retirement commission, will focus on factors government should consider relating to state pension age.

In particular, Morrissey is expected to consider the merits of linking state pension age to life expectancy, including on fairness between generations, as well as the role of state pension age in managing the long-term sustainability of the state pension.

She will also report on the international experience of automatic adjustment mechanisms (AAM) for making decisions about state pension age.

The DWP said that the independent report should deliver a set of factors the government should consider when reporting to on an appropriate state pension age, with plans for these to part of an “enduring framework” that underpins the pay as you go state pension system.

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