The state pension age should be increased to 68 in less than 20 years' time, a government commissioned report has concluded.
John Cridland today delivers a wide-ranging independent review of the state pension age, alongside a periodic review by the government's actuary department.
In 2014, the government committed to reviewing the state pension age once every parliament. Current plans are for the state pension age to rise to 66 in 2020, 67 in 2028 and 68 in 2046.
But Cridland, the former head of the CBI, concluded the rise to 68 needs to be brought forward to between 2037 and 2039. He said:
My review considers the consequences of an ageing society. It addresses how we can afford to live a longer pensionable life, how we can work longer where this is necessary and possible, and where it is not, how to give assistance to those who need it.
“The aim is to smooth the transition for tomorrow’s pensioners, and to try and make the future both fair and sustainable.”
He also concluded the state pension age should increase by more than one year during any 10-year period.
The government has committed to keeping the triple-lock in place during the next parliament. But, despite calls from Labour to do so, it has refrained from pledging to keep the mechanism in place beyond 2020. The report said:
We recommend that the triple lock is withdrawn in the next parliament.
The conclusion looked like "the death-knell" for the mechanism, according to Hargreaves Lansdown's head of retirement policy Tom McPhail.
Meanwhile, AJ Bell's Tom Selby said its abolition "looks like the lowest hanging fruit".
Former pensions minister Steve Webb said it was "right to review the policy at the start of each parliament rather than abolish it now".
Meanwhile, commenting on plans to bring forward state pension age increases, Webb warned the government risks "misleading parliament".
He said: "In the last Parliament MPs voted for the new arrangements on state pension age increases on the basis that people would spend two years in work for every one year in retirement.
"This is not what Parliament voted for and is clearly driven by the Treasury."
McPhail summarised what it meant for younger Britons.
“This report is going to be particularly unwelcome for anyone in their early 40s, as they’re now likely to see their state pension age pushed back another year. For those in their 30s and younger, it reinforces the expectation of a state pension from age 70," he said.
The good news, in as much as there is any here, is that these measures will help to keep the state pension sustainable in the long term.
Selby added: "As life expectancy continues to march ever higher, it was inevitable the Government would eventually look to take a grip on state pension spending."