Although life expectancy is still increasing in each year, the latest projections show a slower increase in improvements to mortality rates in the future than the last projections. This is because observed mortality rates at some ages were higher in 2012 and 2013 than assumed in the last projections.
State Pension Age for men is currently 65 and will gradually increase for women to equalise with men by 2016.
An increase to 66 for both men and women will be phased in between 2018 and 2020. State Pension Age is planned to be 67 by 2028.
Legislation provides for State Pension Age to increase to 68 by 2046. However this was superseded by more recent legislation that provides for State Pension Age to be regularly reviewed.
One of the criteria for the review is that the proportion of adult life spent over State Pension Age should be maintained, implying that increasing life expectancy will translate into increases to State Pension Age.
The Office for Budget Responsibility has translated the principles underpinning the review into estimates of when State Pension Age will increase, based on the previous ONS projection of life expectancy for its long term fiscal sustainability report.
On the basis of the previous ONS projections, the OBR said State Pension Age would increase to 68 by 2036 rather than 2046.
If the changes to life expectancy forecasts underpinning the latest ONS projections feed through to the review of State Pension Age, the increase to 68 may not happen until 2041.
The review of State Pension Age will have to be laid before Parliament by May 2017 and there are no revisions to ONS forecasts expected before then.
State Pension Age is important for Prospect members because it determines when their state pension becomes payable and also because the pension age for many members of public sector pension schemes has been aligned with State Pension Age.
Neil Walsh, Prospect pension officer, said: “Estimates of life expectancy are inherently uncertain. The disappointing mortality data in 2012 and 2013 may turn out to be a statistical blip or the start of an important trend.
“Increases to State Pension Age should be based on observable improvements in mortality as much as possible, and not on projections of improvements that may not actually happen. Prospect will contribute to the review of State Pension Age on behalf of members.”