Former minister Sir Steve Webb has issued a warning regarding the future of the state pension
The state pension age will likely be raised to 70 years old even if the triple lock is scrapped, a former Department for Work and Pensions (DWP) minister has warned.
Sir Steve Webb, who served as pensioners minister under the coalition Government, claims workers under the age of 40 could be required to remain in employment until they reach 70 before becoming eligible for their state pension.
This prediction factors in whether the triple lock remains in place, which determines whether the retirement benefit's annual rise goes up by either the highest of inflation, average wage growth, or 2.5 per cent.
Earlier this week, the Office for Budget Responsibility (OBR) published a report indicating that the planned increase in pension age to 68 will likely be accelerated by seven years, moving from the original 2044-2046 timeframe to 2037-2039.
This acceleration would affect approximately five million individuals currently between 49 and 55 years old, who would need to continue working an additional year beyond their previous expectations unless they possess adequate private retirement savings.
The state pension age presently stands at 66, with increases already scheduled to address the financial pressures created by longer life expectancy.
Sir Steve, who designed the triple lock mechanism during his time as a Liberal Democrat minister, maintains that raising the retirement age is unavoidable regardless of debates surrounding the guarantee policy.
The former pensions minister, now a partner at consultancy LCP, told The i Paper it was "not sustainable" to hold the retirement age given the strain on public finances.
He noted that the male pension age was established at 65 during the 1920s, meaning it will have increased by just two years over more than a century even after the scheduled rise to 67 between 2026 and 2028.
Those under 40, and "particularly the under-30s", are "at risk" of facing a pension age of 70, Sir Steve cautioned.
The annual state pension bill currently amounts to roughly £150billion and represents approximately 5 per cent of GDP, a figure that exceeds double the nation's defence expenditure.
Without policy intervention, the OBR projects this proportion will climb to nine per cent of gross domestic product (GDP) over the coming half-century.
Tom Selby, director of public policy at AJ Bell, argued that rising costs driven primarily by improved longevity mean the government "must do something" to reduce expenditure or face having to "substantially pare back spending in other areas".
He added that it would be "no surprise to see the state pension age eventually hit age 70 for today's younger workers" and encouraged them to accumulate private pension savings.
Scrapping the triple lock could reduce projected 2076 spending from around 9 per cent to approximately 7 per cent of GDP, according to OBR estimates.
Numerous Labour MPs have privately indicated the triple lock should be abandoned on grounds of generational fairness, seeking a more sustainable approach that prevents younger workers from bearing an ever-increasing burden for older generations.
