Just before Parliament broke for its summer recess, the government quietly announced a fresh review of the State Pension Age (SPA),a move that could have long-term implications for family-run businesses.
Pension policy has long been a politically sensitive issue. The government has already faced backlash over winter fuel payments and pressure from campaigners like Women Against State Pension Inequality (WASPI), who were affected by previous SPA increases. Now, under a commitment inherited from the previous administration, a new review is underway, one that family business owners should pay close attention to.
In mid-July, the Department for Work and Pensions (DWP) announced two new SPA reviews, buried among a flurry of pre-recess statements. While overshadowed by headlines like the relaunch of the Pensions Commission, the SPA review could significantly affect both personal retirement plans and business continuity strategies.
Current and Proposed SPA Timeline
- SPA is currently 66 for both men and women.
- It will rise to 67 gradually starting April next year.
- Legislation currently sets the increase to 68 between 2044 and 2046.
- Previous reviews suggested earlier increases: 2037–39 (2017 review) and 2041–43 (2022 review).
- The government has committed to giving at least 10 years’ notice before any SPA change.
The original 2037–39 proposal now seems unlikely, partly due to the 10-year notice requirement. But there’s another key factor: life expectancy projections have dropped. In 2017, a 68-year-old man was expected to live another 21.1 years; now that figure is 18.4. For women, it’s dropped from 23.0 to 20.9 years. These figures could justify delaying or even scrapping further SPA increases.
However, the financial pressures on government are immense. Billions in annual savings are tied to SPA reform, and that economic reality may outweigh demographic trends.
Implications for Family-Controlled Businesses
For owners of family-run enterprises, SPA changes are more than just policy, they’re strategic. Here’s why:
- Succession Planning: Delayed retirements may affect when senior family members step back and younger generations step up.
- Workforce Management: Older employees may stay in the workforce longer, impacting recruitment, training, and wage structures.
- Financial Forecasting: Pension costs, retirement benefits, and long-term compensation plans may need to be reassessed.
- Legacy Considerations: SPA changes could influence how and when ownership is transferred, especially in businesses where retirement and succession are closely linked.
While the DWP may have won recent policy battles, such as on winter fuel and disability benefits, SPA reform is likely to be a tougher fight, one that business owners should monitor closely.
8th September 2025
