The government should consider linking the state pension age (SPA) to a fixed number of years in retirement - around 20 on average - rather than a proportion of adult life, LCP has said.

The comments were made as part of a set of “radical” proposals to overhaul the UK state pension system, aimed at restoring long-term sustainability while protecting those with lower life expectancy from being unfairly penalised.

In a new report, Where Next for State Pension Age?, the consultancy claimed that linking SPA to a fixed number of years in retirement would ensure that future gains in life expectancy translated fully into longer working lives, helping to stabilise costs as the population ages.

Alongside this, the firm called for a new “guarantee period” of five years for the state pension, ensuring that everyone reaching pension age, or their estate, would receive at least five years of payments.

The measure, modelled on private-sector annuity guarantees, would be a first for the UK’s state system and would give greater reassurance to those in more deprived areas with shorter life expectancy.

LCP state pension experts argued the proposals were designed to “square the circle” between the need for fiscal prudence and the need to maintain fairness across regions and income groups.

Indeed, the report noted that although life expectancy for young adults rose by 17 years over the 20th century, the SPA remained unchanged for most of that period.

The result, according to LCP, was that people were now spending far longer in retirement than any previous generation - a trend it warned was “historically unprecedented and fiscally unsustainable.”

Echoing this, LCP partner and longevity specialist, Stuart McDonald, said the UK’s state pension system was long overdue for reform.

“Life expectancy has risen dramatically, but State Pension age hasn’t kept pace,” he continued.

“We’ve ended up with historically long retirements that the system simply can’t sustain.

Setting the pension age based on a fixed number of years in retirement - say, 20 - would restore balance and fairness. It would also reflect the reality that today’s workers are funding increasingly lengthy retirements.”

He added that the proposal would “help the system catch up” with decades of demographic change and ensure a fairer deal for younger generations still in the workforce.

However, former pensions minister and LCP partner, Steve Webb, stressed that while raising the pension age was “unavoidable,” the process must also be equitable.

“The case for increasing the SPA is clear,” he stated.

“But it has always been difficult to do so fairly for people in deprived areas who don’t live as long.

"A guaranteed minimum payout period of five years would be a simple, concrete way to ensure that everyone who has paid in gets something back.”

He described the approach as a “something-for-something” reform - a policy that rewards contributions while maintaining the financial sustainability of the system.

LCP’s modelling suggested that introducing the guarantee would add little to overall costs, as most retirees already draw a pension for more than five years.

However, it would provide targeted protection for those most affected by longevity inequalities and make it easier for the government to justify future increases in the age of eligibility.

The firm also cautioned against other options such as early-access schemes or tying state pension eligibility to healthy life expectancy, warning that these would raise “serious challenges of fairness, cost and practicality.”

Summarising the proposals, LCP said the aim was to design a system that “keeps faith with contributors while remaining affordable for generations to come”.

In August, the Department for Work and Pensions (DWP) launched a call for evidence to support its third state pension age (SPA) review, seeking further views on the factors it should consider in determining the SPA for future decades.

The government previously announced plans for a review of the SPA, which is required as part of its obligations under the Pensions Act 2014, alongside the revival of the Pensions Commission, to explore adequacy issues and concerns about undersaving.

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