State pension age rises to 68: Government to accelerate timetable for increases

 
Oliver Gill
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BRITAIN-POLITICS
New work and pensions secretary David Gauke has previously spoken of the need for "big decisions" on the state pension age (Source: Getty)

Rises in the state pension age will be brought forward in plans announced by the government this afternoon.

Work and pensions secretary David Gauke revealed to parliament proposals for the pension age to rise to 68 over two years from 2037.

Those born before 5 April 1970 will not be affected.

Retirement ages were previously scheduled 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.

"I want Britain to be the best country in the world in which to grow old, where everyone enjoys the dignity and security they deserve in retirement," said Gauke.

Since 1948 the state pension has been an important part of society, providing financial security to all in later life. As life expectancy continues to rise and the number of people in receipt of state pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations.

He continued: "Combined with our pension reforms that are helping more people than ever save into a private pension and reducing pensioner poverty to a near record low, these changes will give people the certainty they need to plan ahead for retirement."

Read more: Are the Tories plotting a dramatic hike in the state pension age?

'Informed'

In 2014, the government committed to reviewing the state pension age once every parliament.

In March this year, John Cridland delivered a government commissioned report on the matter alongside separate findings by the state's own actuary department.

Cridland concluded the state pension age should be increased to 68 in less than 20 years' time.

The government said the plans had been "informed" by Cridland's findings.

The move will likely be a big test in the House of Commons of Theresa May's government. Labour campaigned to row back on state pension age increases, capping them at 66.

Gauke has previously referenced the need for "big decisions" on pensions, saying: "We need a state pension that is both fair and sustainable”.

Read more: The state pension shake-up: what the experts say

What the experts say

Former pensions minister Steve Webb, who now works for asset manager Royal London, told City A.M.: “I think what is good is that it is line with the Cridland Review.”

“They do an evidence-based review for a year and they accept the recommendations. That’s got to be a good way of doing policy, not just making up a number.”

“Changes are necessary if the current system is to be made sustainable,” said Ed Monk from Fidelity International.

“The population is growing, ageing and living for longer and accelerating the rise in the state pension age is just making us walk faster up a path which we were already on.”

Jeremy May, head of pensions at accountancy giant PwC, added: “It makes sense from an economic perspective... If you go back to the 1900s you had 10 workers supporting one pensioner. Now, you have just over three workers supporting each pensioner.”

How the proposals affect you

Date of birth Will you be affected?
On or before 5 April 1970 No change
Between 6 April 1970 and 5 April 1978 Your State Pension age is currently 67. It would increase to between 67 years and 1 month, and 68 years, depending on your date of birth
After 6 April 1978 No change. Your State Pension age remains 68

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