The state pension age will increase in line with improved longevity in the future, following measures announced by George Osborne in his Budget speech.
This move could see children born today having to wait until as late as age 80 before they receive a state pension.
The Office for Budget Responsibility will publish details this summer of how the longevity link could work.
Linking the state pension age to longevity will mean the government does not need to introduce new legislation at regular intervals to keep the system affordable.
Because we are on average all living for longer, the state pension age needs to be moved higher at regular intervals to manage the cost of providing a state pension income in retirement.
Individuals who are planning for their retirement will need to carefully consider their own selected retirement age as a result of this move in the Budget.
Because the state pension often makes an important contribution to levels of income in retirement, a state pension age later than a selected retirement age could result in an income shortfall for several years. This income shortfall can be met from other income or assets, assuming planning has taken place.
Another move in the Budget related to the state pension was the introduction of a single-tier state pension worth around £140 for those who retire in the future.
The aim of this measure is to simplify the state pension system and its interaction with the state second pension.
The new single-tier state pension will be based on National Insurance contributions and further details will be published in the spring, with a decision taken at the next spending review and an introduction at the start of the next Parliament.
We believe that the new single-tier state pension will help remove lots of people from the complexity of means testing when they reach retirement. We look forward to seeing more details of how it will be implemented.
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