On the Postponement of Increases in State Pension Age through Health Improvement and Active Ageing.

The UK population is predicted to grow from 65 m in 2015 to 71 m in 2030 and 75 m in 2040, with the number aged 65-plus rising to 18 m. Successive governments have been reluctant to increase taxes but this looks increasingly unsustainable, if the increasing demand for health and social care is to be met. Increasing state pension age is the customary response for keeping pension contributions and benefits in balance in Pay As You Go (PAYG systems). However, this policy raises concerns about the capability of people to work to ever higher pension ages. Using newly available labour market data on health and disability, the paper finds limits to how far pension age can be increased without necessary health improvements. If improvements were forthcoming, planned pension age rises could be postponed. However, inequalities in healthy life expectancy across the UK are a major barrier to its achievement. [ABSTRACT FROM AUTHOR]