Govt brings forward rise in state pension age

State pension age to rise to 68 earlier than planned			
				 
   by Simon Garner 
  Published
State pension age to rise to 68 earlier than planned by Simon Garner Published
Author

20 July, 2017

"This effectively gives the nation a clear expectation of where the State Pension Age is going for decades to come".

Incorporating social care into national insurance would offer an opportunity for the government to rethink state pension age and overall retirement provision, and take account of individual needs.

"The Commons Work and Pensions Committee have warned previously that maintaining the pensions triple lock may mean having to push the state pension age above the average life expectancy for men in poorer parts of the country".

However, the proposals must be approved by Parliament before they are agreed - and this won't happen until the next government state pension age review in 2023.

Former CBI director John Cridland's report was released in March, and said bringing forward the state pension age increases would cut state pension spending as a proportion of GDP by 0.3 per cent compared to what the Office for Budget Responsibility had projected.

Steven Cameron, Pensions Director at Aegon, commented: "It's ironic that the Government is proceeding with an accelerated increase in the state pension age days after statistics show improvements in life expectancy may be levelling off, meaning this increase may be less justified on affordability grounds". People born between 1970 and 1978 will see the pension age rise to 68 depending on their date of birth, and people born from April 1978 will get their pension when they reach 68.

Following the government's announcement, the key message from pension experts is not to rely on the state pension in retirement.

"Many occupational schemes are created to interact with the state pension system", he said.

Work and Pensions Secretary David Gauke
Work and Pensions Secretary David Gauke

The Government added in a press release that "those affected by this proposed timetable will on average still receive more state pension over their lifetime than generations before them".

Currently, the SPA is due to rise to 66 by 2020 and to 67 by 2028.

"Failing to act now in light of compelling evidence of demographic pressures would be irresponsible and place an unfair burden on younger generations", Mr Gauke's department said.

Shadow work and pensions secretary Debbie Abrahams said: 'This is an astonishing continuation of austerity that means 34 million people will work longer than under Labour's plans.

The government's decision to increase the United Kingdom state pension age to 68 sooner than previously expected is in line with recommendations of John Cridland's recent official Review.

The data from University College London, showing that the rate of increase in life expectancy has slowed, will inevitably lead to questions around the pace of State Pension Age increases.

In his foreword to the government's report, published today, Gauke said the change would save £74bn (€83.6bn) by 2045-46.

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