Denmark raises retirement age to 70: Could Britain follow suit with the state pension?
Denmark's move to hike its retirement age to 70 by 2040 has got people asking the obvious question - could the same happen here?
As things stand now, men and women's state pension age is 66, and between 2026 and 2028 it will rise to 67.
Officially, the next rise to 68 is not scheduled until the mid 2040s, which would affect those born on or after April 1977.
The Government is required by law to review the state pension age periodically.
However, the last two reports in 2017 and 2023 recommended speeding up the increase to 68 - and then went ignored.
The next review isn't due until spring 2029, but Labour might take as little notice of any findings as the Tories.
It's not as if raising the state pension age is going to become any less of a political hot potato, as money experts pointed out when we asked for their views on Denmark's decision.
Meanwhile, it's worth noting that the minimum pension age for accessing workplace and other private retirement savings will rise from 55 to 57 from April 2028,
Governments have in the past tended to keep the state pension and private pension ages roughly 10 years apart, so any future increases could well continue to happen in tandem.
What has happened to pensions in Denmark?
Denmark ties its retirement age to life expectancy, and revises it every five years.
The country's current retirement age is 67, and this will rise to 68 in 2030 and 69 in 2035.
Despite protests in Copenhagen, an overwhelming 81-21 vote in the Danish parliament last week decided to increase it again to 70 in 2040.
The latest age hike will affect Danes born from 31 December 2070 onwards.
Labour might stick with 'no change' policy
'Pension ages have been rising around the developed world in the face of a combination of rising life expectancies and falling birth rates,' says former Pensions Minister Steve Webb.
The UK faces major challenges in meeting the state pension, NHS and care costs of an ageing population, he says.
But regarding the politics of raising the state pension age, he adds: 'Currently policy is to give at least 10 years' notice of changes, which means that increased pension ages will generate no extra revenue for at least two parliaments but will generate negative publicity straight away.
Webb, who is a partner at LCP and This is Money's retirement columnist, goes on: 'It is no coincidence that the last two independent reviews, both of which recommended speeding up the move to age 68, have so far been ignored.
'It is quite possible that the next review, due during this parliament, will again lead to no change in the legal timetable for increases in state pension age.'
Many people don't know their own state pension age - so check
'Each government has to review the state pension age during their term in parliament,' points out Tom Selby, director of public policy at AJ Bell.
'For those looking forward to retirement that may feel like the sword of Damocles hanging over their future pension plans.
'However, government aren't obliged to accept the recommendations of the review and any further increases in the state pension age are likely to be gradual and a long way in the future.'
AJ Bell research shows almost half of all adults under state pension age don't know when they will start receiving it, so Selby suggests checking this and using the knowledge to plan ahead.
'Once you've figured out when you might expect to receive your state pension, you can start working backwards to think about when it might be possible to retire on your private pension savings,' he says.
'If things do change and your state pension age increases by a year, then you're at least starting from an informed position and hopefully won't need to make too many adjustments to your retirement plans.'
> Check your state pension age: Use the Government's calculator
What are the options? Raise age, moderate payments, hike taxes or means-test state pension
'When is good news, bad news? When it's about living longer and the state pension,' says Stephen Lowe, director at retirement specialist Just Group.
'The good news is that as a nation we're living longer – figures for 2023 from the Office for National Statistics show the number of people aged 90-plus has doubled over the last 30 years. But the fertility rate in the UK is dropping.'
Lowe says by 2050 it's projected one in four people in the UK will be aged 65 years and over, up from almost one in five in 2018.
'Here's the bad news – it means that with more people of state pension age and fewer working people, the burden of funding the state pension becomes heavier on those paying taxes.'
'If we don't want to increase taxes, or introduce a means-tested state pension, then there are two main ways to lighten the load – either increase the age at which people receive the state pension or moderate the amount paid.
'Neither is a political vote winner but the problem isn't going away anytime soon so some changes seem almost inevitable.'
State pension age rise will hit people who depend most on it hardest
Other developed nations face similar challenges to Denmark on how to balance longer lives with a squeezed public purse, says Standard Life's retirement savings director Mike Ambery.
'The state pension age is subject to constant review and quicker, higher increases remain possibilities alongside other options like removing the triple lock or even means testing – all of which would prove hugely controversial and politically challenging.
'Raising the state pension age further risks hitting those most dependent on it the hardest. Lower income groups without other sources of retirement income often have shorter life expectancies and might find it harder to work into later life.'
'Any future changes must be taken with great care, and come with plenty of notice to help people plan ahead.'
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