Is the Retirement Age set to become even higher ?
Millions of people in their 50s may have to work until the age of 68 following a shock pensions review.
Ministers are considering a shake-up of the pensions timetable that could see the planned rise in the state pension age from 67 to 68 brought forward by as much as 16 years. Under the most radical option the change would happen in 2030 and would see everyone presently under 54 working a year longer than they had been led to expect. But even the best-case scenario would see the rise in the pension age brought forward by five years to 2041, affecting people in their early 40s.
The change is designed to make the pensions system more affordable, but Lib Dem leader Tim Farron last night accused ministers of ‘creating another pensions bombshell for another generation of people’, and former pensions minister Baroness Altmann said it would be grossly unfair to expect people to work even longer when many in ill-health face such a short retirement.
The official retirement age is already being increased from 65, and is due to rise from 67 to 68 between 2044 and 2046. But a review by the Government Actuary’s Department (GAD) commissioned by ministers suggested this date would need to be brought forward.
It said that, under a best-case scenario, the rise could happen between 2039 and 2041. Under the worst-case scenario it would be between 2028 and 2030
The government source said nothing had been decided, but anything suggested by the review was ‘within scope’. Telling millions the age they get their state pension will rise to 68 in little over a decade, when they were expecting it to happen at 67, would however be hugely controversial. By ministers even considering such a draconian plan is a sign that even if they do not go that far, some sort of substantial change is coming.
Work and Pensions Secretary Damian Green is expected to announce his decision in May 2017. It will be based on GAD and on another report, published last month, by ex-CBI chief John Cridland.
The Cridland report suggested that the increase from 67 to 68 should be brought forward to 2039 to improve ‘inter-generational fairness’, while the GAD report suggests even steeper rises.
A government source said: ‘We are considering this and haven’t decided what we are going to do.’
The source said bringing forward the increase to 2030 was at the ‘top end’ of what would be considered.
Baroness Altmann said: ‘I would have thought the Government would be unlikely to go this far, but it is certainly possible. ‘If it did, it would be grossly unfair and a bad policy decision. It is unfair to keep raising the state pension age on these arbitrary forecasts of average life expectancy.’
(taken from an article by Daniel Martin of the Daily Mail)
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