Revisiting the State Pension age Resolution Foundation submission to the 2025 State Pension age review

5th November 2025

Fiscal pressures from State Pension spending have intensified.

The previous Government proposed that the State Pension age should rise such that people spend "up to one-third" of adult life in receipt of the State Pension.

Subsequent consideration of setting the State Pension age has been heavily influenced by this focus on life expectancy. However, there are many other factors to be considered in setting the State Pension age.

It is very welcome that the terms of reference for the review include a range of other factors. One key consideration in this, as with all major policy decisions, is budgetary constraints.

Fiscal issues arising from pensions are very acute. In 2024-25, UK State Pension spending stood at 5 per cent as a share of the economy (£138 billion), roughly 15 per cent above where it was in 2010-11, and 35 per cent higher than 50 years ago. This means that today the Government spends more on the State Pension that it does on the day-to-day running of the education and defence departments combined. Over the next 50 years, State Pension spending is forecast to rise by 50 per cent.

There are also important considerations of fairness between different cohorts. As there are constraints on the overall social security benefit, it is legitimate to consider the balance of priorities.

Overall, incomes for pensioners have grown much more strongly than for the rest of the population over the past two decades. This has been heavily driven by the triple lock, the government policy which increases the State Pension by the highest of inflation, average wage growth, or 2.5 per cent - this has ensured bumper rises for pension-age benefits in recent years.

Since 2010 the value of the basic State Pension has risen by 81 per cent, while the basic rate of working-age unemployment benefits has increased by 41 per cent - with the CPI inflation index up by 56 per cent. And as the chart below highlights, there has not been a stable approach to uprating working-age benefits - they increased by just one per cent annually between 2013-14 and 2015-16 with no increase at all between 2016-17 and 2019-20.

Increases in benefits (including the State Pension) have boosted pensioner incomes by £900 above inflation between 2010-11 and 2024-25. By contrast, cuts to benefits for non-pensioners have, on average, decreased incomes by £1,400 a year.

There are also trade-offs between the value of the pension and the length of time for which one receives it. When the previous Government introduced the triple lock, it also announced it would be speeding up the increase in the female pension age to help offset the costs.

Since then, the triple lock has proved to be far more expensive than expected - this is primarily because the period since 2012 has seen much more volatility in earnings and inflation than the two decades before the introduction of the triple lock.

The triple lock has meant State Pension spending is set to be £15.5 billion a year more by 2029-30 than if it had risen in line with earnings growth alone – this is three times what was initially expected. In its March 2025 forecast the Office for Budget Responsibility (OBR) estimated that increasing the pension age from 66 to 67 would save around £10 billion a year by 2029-30.

Putting these two facts together, the additional cost of the triple lock compared to simple earnings uprating is roughly equivalent to the savings made by increasing the State Pension by one and a half years. The rising cost of the triple lock, much greater than forecast, is another reason for increasing the pension age further.

Read the full report HERE