The Queen Speech's outlined plans to link the state pension age to longevity, after increasing it to 67 by 2028. PwC projects it will have to rise again to 68 soon afterwards - by 2031 - so affecting those aged 48 or younger now. People in their late 30s today can expect to wait until they're 70 to receive their state pension.
PwC's projections are based on the rate the state pension age has been accelerating and analysis of future life expectancies, taking into account recent figures from the Office of National Statistics that one-third of babies born in 2012 are expected to survive to celebrate their 100th birthday.
PwC's research highlights that, while people born today will be working for longer, increased life expectancies mean they can expect to spend as long in retirement - around 20 years on average.
Raj Mody, head of pensions at PwC, said: "Many people born today face working from 17 to 77. Most people will want to stop working sooner but may not be able to afford to bridge the gap to the start of their state pension. The rising state pension age puts even more pressure on people to save. Even those people in middle age today whose state pension age might shift by a couple of years may want to start revising their plans now."
Jon Andrews, head of the HR practice at PwC, added: "The gradually rising state pension age raises big questions for employers. For instance, what impact will the aging workforce have on opportunities for younger employees? How will companies have to adapt their organisation models and working practices? What changes do they need to make now to the benefits they offer their employees? Will they need to offer mid career breaks? This isn't some futuristic scenario - the state pension age is increasing steadily and firms need to start planning and adapting now."
