Pension age to rise to 67 by 2026 to save £60bn

WORKERS retiring in or after 2028 will draw a state pension from the age of 67 instead of 66, chancellor George Osborne said yesterday, in a move that will save up to £60bn in the decade after it is implemented.

Osborne said the UK’s average life expectancy had risen by at least a year and a half since the original timetables for state pensions were drawn up, requiring a rise in the state pension age by a year between April 2026 and April 2028.

Forecasts from the Office of Budget Responsibility showed that spending on state pensions is expected to rise from 5.5 per cent of the UK’s GDP in 2015-16 to 7.9 per cent by 2060-61.

John Longworth, director general of the British Chambers of Commerce, said it was “the right response to the UK’s demographic changes”.