What linking pensions to life expectancy really means

George Osborne had a simple throwaway comment in the Budget announcement: that in future the state pension age will be linked in some way to life expectancy. There will be regular independent reviews to work out how life expectancy is changing, and the pensionable age will be tweaked accordingly.

This had been so heavily hinted at over the preceding months that it came as no surprise. 'Tell us something we don't know' was the over-riding reaction.

However, this move is actually a profound change, and is going to have a massive effect on retirement plans.