The government could be plotting a dramatic acceleration of the state pension age, experts have warned.
New work and pensions secretary David Gauke today wrote in the Financial Times that the government will not shy away from making “big decisions” on pensions. He added: "We need a state pension that is both fair and sustainable”.
The state pension age is due to rise to 67 by 2028 and 68 by 2046. But two pivotal reports for the government published earlier this year highlighted this timetable may need to be brought forward in order to stop state pension costs spiralling out of control.
“The government has already shirked one big state pension decision by pledging to retain the triple-lock as part of the deal with the DUP," said AJ Bell senior analyst Tom Selby.
However, with the cost of the existing system expected to spiral as society continues to get older, it appears the new secretary is paving the way for a potentially hugely unpopular acceleration in the timetable for state pension age increases.
With increasing calls on the government to relax the purse strings, in particular with regard to public sector pay caps, an accelerated rise in the state pension age could be one way of balancing the books.
In its General Election manifesto Labour promised to commit to the triple lock, which guarantees state pensions rise at the higher of average earnings, inflation, or at a rate of 2.5 per cent, until 2025. It also promised to cap the state pension age at 66.
Selby said a firmer line by Gauke "will likely set the minority government on a collision course with Labour"
He added: "This could prove a serious test of resolve for Theresa May’s weakened administration.”