UK state pension age should rise to 70, government review recommends
Almost six million UK citizens currently aged under 30 could see their pension age rise as high as 70, if recommendations in two government reports published on Thursday are taken up.
A review by John Cridland, the former director general of the Confederation of British Industry who was appointed last year to conduct the review into the functioning of the UK’s pension system, concluded that the national pension age should be increased from 67 to 68 between 2037 and 2039.
This would mean anyone born after 1971 will have to wait until their 68th birthday to receive a state pension, a change that will affect roughly 5.8m UK citizens.
A separate report by the Government Actuary’s Department that was published alongside the Cridland report, warned that this figure could rise to 70 for those younger than 30 years of age.
The reviews provide recommendations for the government, and it will be up to ministers to decide later this year whether it wants to adopt the increase as policy.
The Cridland review also recommended abolishing the 'triple lock' guarantee, which ensures state pension ages only increase in line with inflation, in the next Parliament.
Other recommendations included introducing the option of part-deferral of state pension and a mid-life 'MOT' to help savers plan for later life, to be delivered by employers and the National Careers Service, plus an option for couples to combine private pensions in one pot.
'Unwelcome' and 'hitting the lowest paid hardest'
Tom McPhail, head of retirement policy at Hargreaves Lansdown, commented that several age groups would be affected by the changes.
“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, which means an extra 2 years of work."
Frances O’Grady, general secretary of the TUC, said hiking the state pension age will hit low paid workers the hardest and will punish those who become too sick to work.
"Ending the triple lock while driving up state pension age would be a stealth cut to the future incomes of workers who are today in their 30s and 40s," she said, adding that there was a 20-year gap in healthy life expectancy between the richest and poorest.
"These changes risk only the wealthy enjoying a decent retirement."
Former pensions minister Steve Webb, now director of policy at Royal London, meanwhile, said it the government implemented the GAD timetable it would be "guilty of misleading Parliament" as MPs had not than long ago voted for state pension age increases on the basis that people would spend two years in work for every one year in retirement.
"On this basis, no one at work today would have a pension age of 70. But on the more aggressive schedule that the government is considering, everyone in their twenties would have a pension age of 70.
"This is not what Parliament voted for and is clearly driven by the Treasury. It is one thing asking people to work longer to make pensions affordable, but it is another to hike up pension ages because the Treasury sees it as an easy way to raise money," he said.