Life expectancy should not be the only factor when setting the state pension age, experts have warned.

Providers shared their concerns as part of the call for evidence for the Third State Pension Age Review, warning any age changes should not deepen inequalities.

The review into the state pension age is exploring how changes in life expectancy, along with other factors should be reflected in future changes to the state pension age.

The state pension age is increasing to 67 by 2028, with a further increase to 68 pencilled in for early 2040.

The Investing and Savings Alliance warned future retirees could be in for a “double whammy” if the state pension age rises while pension tax incentives are cut.

Renny Biggins, head of retirement at Tisa, said: “Without sufficient time and support to plan, many individuals, particularly those in lower-income households or with shorter life expectancies, could find themselves financially exposed, unable to bridge the growing gap between retirement and access to the state pension.”

Inequalities

Similarly, the Standard Life Centre for the Future of Retirement, warned it was crucial for the review to avoid deepening inequality and hardship for future generations.

It urged the independent report, which will be published following the conclusion of the review, to take account of levels of private saving and ensure it is based on a “balance between fairness, adequacy and sustainability”.

Steven Cameron, pensions director at Aegon UK said retaining the triple lock in the future was a factor that needed to be addressed.

“The government instructed the review to assume the triple lock will continue indefinitely.

“This will add pressure to increase the state pension age further and faster, despite it needing to be reformed at some point to stop state pensions eventually catching up with average earnings,” he added.

Clear communication

Regardless of any changes, providers stressed the need for these changes to be communicated clearly and timely.

Tisa and Aegon suggested a minimum 12-year lead time for any changes made to the state pension age.

While also advocating for people to have the option to take their pension a little early should any increases in state pension age go ahead.

The Standard Life Centre for the Future of Retirement felt believed a statutory requirement for the government to review retirement adequacy every five years, alongside the state pension age was necessary.

Read more @ftadviser