Almost six million people are expected to see their State Pension Age increase by a full year under proposals announced today, according to Towers Watson.

John Ball, head of UK pensions at Towers Watson, said: "The Government has timed the latest increase in the State Pension Age so that it delays the retirement of the 1960s baby boomers. Almost six million of them will now spend a full year less claiming State Pensions. Nonetheless, official estimates of life expectancy have increased so much that this group is still expected to claim their State Pensions for longer than the last Government intended when it told them they would have to wait until 66 before retiring."

The Government has previously talked about finding a "more automatic mechanism" to link the State Pension Age to life expectancy after it reaches 66 in 2020. Towers Watson says that the plans announced today may provide a clue as to how this will work and therefore when the State Pension Age could reach 68.

Mr Ball said: "According to official projections, average lifespans from age 67 in 2028 are expected to be 21.4 years for men and 23.9 years for women. That's the same as average life expectancy at 66 in 2020. If the Government wanted to keep this more or less constant going forward and put its faith in the official projections, it might increase the State Pension Age to 68 by about 2036 – 12 years sooner than planned under current legislation."

Previously, there have been suggestions that the Government wanted extra years of life expectancy to be shared between time spent in work and time in retirement. John Ball said: "This ambition for longer retirements may be another casualty of straitened economic circumstances."

The Government has continued to favour step changes in the State Pension Age over more gradual increases. Mr Ball said: "Once the State Pension Age reaches 66 in October 2020, it will be frozen for five and a half years before rising again. This means that people born in 1959 might on average be expected to spend an extra six months or so in receipt of their State Pension compared with people born in 1961. Winning this year-of-birth lottery can be worth thousands of pounds."

Towers Watson says the Autumn Statement announcements mean that:
• People born between 6 April 1961 and 5 April 1968 see their State Pension Age rise by a full year;
• People born between 6 April 1960 and 5 April 1961 see their State Pension Age by less than one year; and
• People born between 6 April 1968 and 5 April 1969 see their State Pension Age rise by less than one year (or potentially more than this, depending on subsequent announcements about when the State Pension Age will start rising towards 68).