The plan needs you working at 67. Fewer than one in eight people past their mid-60s has a job

On 6 April this year, the state pension age began moving from 66 to 67. It reaches 67 in April 2028, and it affects anyone born on or after 6 April 1960. A further rise, to 68, is on the statute book for 2044 to 2046, and an independent review of when it should happen is under way.

The reason is money. The OBR estimates that lifting the pension age from 66 to 67 saves the Exchequer about £10.5 billion a year by the end of the decade, against leaving it at 66. Most of that is simply paying the pension to fewer people. Some of it assumes something else: that a number of people, denied a pension for another year, will stay in work and pay tax on their earnings.

That second part is a claim about behaviour. It is worth asking what the evidence says.

We have a good test, because we did this before. The pension age went from 65 to 66 between 2018 and 2020. Analysis of that rise found that being below the pension age raised the employment rate of 65-year-olds by 7.4 percentage points for men and 8.5 for women. A Department for Work and Pensions evaluation in 2023 put it at about 55,000 more 65-year-olds in work than there would otherwise have been, and average earnings across all 65-year-olds up by around £52 a week.

That is a real effect. It is also a modest one, and it starts from a very low base. In 2024 the employment rate for people in their mid-60s and older was 11.9 per cent. For people aged 16 to 64 it was 74.8 per cent. Most people, by the time the state says they may stop, stopped a while ago.

Look at where they went. After the pandemic, the sharpest rise in the number of people neither working nor looking for work came among those aged 50 to 64. The ONS's own work on the over-50s found something that matters for how we read that: many people who describe themselves as retired left work for reasons of health. Retirement was the word they used. It was not always the decision they made.

This is where the fiscal arithmetic and human behaviour part company. Raising the pension age is a lever that assumes a choice. Pull it, and people who were choosing to stop will choose to keep going, because a year without a pension is expensive. For that group, it works. For the group who left at 58 with a bad back, or to look after a parent, there is no choice to change. The lever does not reach them. What reaches them is the benefits system, and the Institute for Fiscal Studies notes that basic means-tested support in 2026 is 143 per cent higher for a single person just above pension age than for a similar person just below it. For that group, raising the age does not produce work. It produces another year on the poorer side of a line.

**Why it matters here.** The state's fifty-year plan, published on 7 July, needs a working life that runs to 67 and then to 68. This paper asks what people do when they do not have to work. Britain already has a large group of people in their fifties and sixties who are not working and did not choose it. Nobody in the leadership contest that opened this morning has named them, and no plan currently on the table says what they are supposed to do between the day the work stops and the day the pension starts.