New legislation means Denmark is on track to have the highest state pension age by 2040, affecting people born after 1970. The law links the country’s state pension age to its life expectancy, which is currently 81.7 years.
So if the life expectancy increases or decreases, the state pension age will move in tune with it. The UK has a similar policy linking these two figures.
Some experts claim Denmark’s move means it’s “almost inevitable” that the UK will follow suit and move the state pension age up to 70. It’s currently sitting at 66, but how high can it go?
The state pension age is usually the earliest you can start claiming your state pension, and tends to be when most people retire as a result. It ties in with the country’s average life expectancy to ensure people are spending the right proportion of their lives drawing from a state pension.
The UK state pension age is due to increase to 67 between 2026 and 2028, affecting those born on or after April 6,1960. Between 2044 and 2046 is expected to hit 68, this will impact people born on or after April 5, 1977.
However, some experts speculate that these deadlines could be brought forward. Jason Hollands, managing director of wealth management firm Evelyn Partners, told the i Paper he believes the retirement age will be 68 before the mid 2040s.
Under the Pensions Act 2014, the state pension age can be reviewed regularly at a minimum of once every five years. The last review started in December 2021.
He explained that medical advancements could drastically increase life expectancy beyond previously predicted levels. Thus increasing the state pension age in kind.
Sir Steve Webb, former pensions minister and partner at LCP, weighed in adding: “Pension ages are rising across the developed world as countries come to terms with the combination of people living longer and fertility rates dropping, meaning there will be fewer workers in future to fund pension costs.”
Other experts have argued that it is not feasible to compare the UK and Denmark. Denmark has a vastly different state pension system which includes some means testing as well as early retirement options, neither of which apply to UK state pensions.
Currently, Denmark’s state pension age is 67. It is among the highest in the world with Italy, Australia, the Netherlands, Greece, and Iceland also sitting at this threshold.
Very few countries have a state pension age below 60. This includes Sri Lanka at 55, Indonesia at 58 and Bangladesh at 59.
