State pension age alert: Britons warned rise to 70 ‘almost inevitable’ after Denmark announces Europe’s biggest hike

Denmark has passed a new law that will increase its state pension age to 70 by the year 2040. This decision makes Denmark the European country with the highest planned retirement age, and it could influence how other countries, including the UK, think about pension reform.

Why Denmark Is Raising Its Retirement Age

Denmark has followed a long-standing policy of linking retirement age to life expectancy. Right now, life expectancy in Denmark is around 81.7 years. The government believes that as people live longer, they should also work longer to help balance the country’s pension costs.

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Under the new rules, anyone born after 31 December 1970 will face a gradual rise in retirement age:

• It will go up to 68 by 2030
• Then to 69 by 2035
• And finally to 70 by 2040

The Debate in Denmark

While many political leaders support this change, not everyone agrees. Denmark’s Prime Minister, Mette Frederiksen, has voiced concerns about whether it’s fair to raise the retirement age automatically. Trade unions and left-wing parties also argue that the policy is especially unfair to people doing physically demanding jobs. These workers may find it hard to keep working as they grow older.

This issue of balancing money needs with social fairness is also being discussed in many other European countries, including the UK.

What’s Happening in the UK?

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Right now, the state pension age in the UK is 66 for both men and women. Between 2026 and 2028, it will rise to 67. After that, it’s planned to go up to 68 between 2044 and 2046. This would affect people born after 5 April 1977.

Some experts think the UK might raise the pension age even earlier, especially as the population grows older and people live longer. However, the UK government usually gives a 10-year notice before changing the pension age. That means any big change is unlikely to happen very soon.

Could the UK Follow Denmark’s Lead?

Jason Hollands, a managing director at a wealth management company, said that bringing the pension age increase forward to 2035 is the earliest realistic option. But he thinks it’s “almost certain” that the age will go up earlier than planned before the 2040s.

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Former pensions minister Ros Altmann said it’s not completely fair to compare Denmark and the UK. In Denmark, people can retire early and the state offers more flexible pension options. In the UK, those who can’t work until the retirement age often struggle financially, especially if they don’t have private savings.

Why Raising the Pension Age Is So Complicated

Former pensions minister Sir Steve Webb highlighted three main reasons why increasing the pension age is difficult in the UK:

• Governments face public backlash but don’t get extra pension savings during their term due to the 10-year delay rule.
• If more people of working age start working again, it could help fund pensions without needing to raise the retirement age.
• If the cost of pensions is reduced in other ways (like changing rules or lowering increases), it could avoid the need to raise the age.

He also warned that life expectancy varies a lot in different parts of the UK. So, raising the pension age for everyone might hurt people in poorer areas more than others.

Denmark’s move to raise the retirement age to 70 is a sign of the times. As people live longer and fewer young workers are available to support the system, governments must find ways to make pensions affordable. While the UK is taking a slower approach for now, growing financial pressure may force changes sooner than expected.

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