The Government recently announced that the State Pension Age will increase to 68 in 2037 - seven years earlier then planned. This may seem odd given current news about longevity improvements slowing down but it actually makes perfect sense. The first State Pension in the UK was introduced in 1908 and paid the 25% of people who reached age 70 for an average of 9 years. The Basic State Pension came in from 1948 and allowed people to retire at 65, with a life expectancy of 12 years. But, by 2014 this had risen to 21 years (for men) so it’s no wonder that something had to give. The Office of Budget Responsibility (OBR) projects that the state pension will grow from 5% of GDP to 7.1% of GDP over the next 45 years. That’s an extra £40bn to find every year, when other age-related spending on healthcare and so on will already be adding an extra £100bn a year. We can either agree to all pay a lot more tax (there aren’t enough high earners to cover it on their own) or we can make some hard decisions on cutting back the benefits. With an estimated bill of over £700 a year for each and every household, I’m betting that politicians may have to face up to reality to get elected. There is a good argument that the improvements in longevity have slowed down recently but the general trend is still upwards. Life expectancy for men went up from 70 in 1981 to 79 in 2011, slightly narrowing the gap to female life expectancy which increased slightly slower to 83. The rapid improvements from 2000-2010 largely reflected a massive reduction in smoking rates (and other lifestyle factors) which can’t be repeated, since you can only give up smoking once. Recent data might be just a blip with a bad winter last year leading to 140,000 deaths of people over 65 – an 11% increase on the previous year. There was also a similar mortality spike in 2015 after a flu epidemic. There is also a strong case that our bodies do eventually just wear out and that improvements in longevity must ultimately slow down and stop. US scientists writing for the Nature Journal last year concluded that there had been little improvement for people aged over 105 for the last two decades and the eminent Professor Jay Olshansky of the University of Illinois agreed with their conclusion that the natural limit to life is around 115. Try telling that to Emma Morano or Jeanne Calment though. Emma died last year at 117 and Jeanne died in 1997 at the ripe old age of 122, the oldest verified age ever. In fact, Aubrey de Grey (Cambridge University) says that the first person to live to 1,000 may already have been born. With a baby girl born this year expected to live on average to 94, medical science probably does have over 100 years to find a way to find a way to make this prediction come true. That said, de Gray claimed in 2004 that the first person to live to 1,000 might already be in their 60s, making them at least 73 by now. That prediction is looking a bit optimistic so it’s not surprising that he’s toned it down a bit. The key thing for the Government is to make decisions based on evidence, good advice and thoughtful consideration. Exactly the same applies to Trustees (and employers) deciding on the contributions needed to fund their pension schemes in the face of this uncertainty.