Plans to bring forward a planned rise in the State Pension age to 68 have reportedly been put on hold amid falling life expectancy across the UK and fears of a backlash from middle-aged voters. The Financial Times reports that ministers have now decided to delay a decision on the increase until after the next general election.
State Pension age is currently 66 for both men and women and is due to rise to 67 between 2026 and 2028, with a further rise to 68 planned between 2044 and 2046. However, reports earlier this year suggested that the UK Government wants to bring the rise to 68 forward to the late 2030s.
The Financial Times also reports that ministers had expressed concerns about “ordinary voters” resenting having to work for longer after Chancellor Jeremy Hunt has just “relaxed the tax rules on pensions for the wealthy” with the scrapping of the lifetime allowance. The paper quoted one UK Government insider as saying: “They were gung-ho to raise the pension age. But they got cold feet.”
Dean Butler, Managing Director for Customer at Standard Life said: “The news that further increases to State Pension age have been delayed will be met with a sigh of relief from those who would have been affected. Those currently in their early fifties were the first that could have been impacted by the changes and these would have been particularly challenging for a number of groups.
“Those planning to start accessing their personal savings before for State Pension age would have had to consider whether they would have stretched far enough to bridge the gap, while others would have faced an extended period in the workforce.”
A Department for Work and Pensions spokesperson said: “The Government is required by law to regularly review the state pension age and the next review will be published by May 7.”
According to the Office for Budget Responsibility (OBR), the annual State Pension bill for 2022/23 is £110bn, but is estimated to increase to around £148bn by 2027/28.
Earlier this month, the Secretary of State for Work and Pensions confirmed that a review of the State Pension age is “under way” and is due to be published by May 7. Mel Stride MP said that he is considering a wide range of evidence, including two independent reports, to assess whether the “rules on pensionable age remain appropriate”.
One report is from the Government Actuary’s Department and explores matters such as life expectancy. The other, from Baroness Neville-Rolfe, is on the metrics that should be taken into account in determining when the next increase in the State Pension age should occur.
Pension experts said the UK Government faces a “tricky balancing act” in supporting an ageing population. Helen Morrissey, senior pensions and retirement analyst at Hargreaves Lansdown said: “The UK Government faces a tricky balancing act with the State Pension - we have fewer working age people supporting an increasing ageing population and costs are enormous.
“However, we also have to face the very real prospect that many people simply are not well enough to work until age 68. Added to this, rapid increases in State Pension age have disrupted people’s financial planning.
“With the debate around the Triple Lock continuing to rage we need to have a proper thorough review of the State Pension to give people more certainty over how and when it is paid so they can plan ahead.”
What will the State Pension age review consider?
The review will consider a wide range of evidence, including:
- Examining the implications of the latest life expectancy data
- Providing a balanced assessment of the costs of an ageing population and future State Pension expenditure
- Consider labour market changes and people’s ability and opportunities to work over State Pension age
- Developing options for setting the legislative timetable for State Pension age that are transparent and fair
The Pensions Act 2014 requires the UK Government to regularly review State Pension age, and in accordance with law, this latest review must be published by May 7, 2023.
With all these proposed changes it can be tricky for people to know exactly when they will qualify for State Pension and be able to retire. Fortunately, the UK Government has provided a free and easy to use online tool which gives an exact date for State Pension qualification, just by entering your gender and date of birth.
The tool provides information on when the user will:
Reach State Pension age
Qualify for Pension Credit
Be eligible for free bus travel - which is 60-years-old for everyone in Scotland
How to use the Pension Age tool
- Choose whether you are looking to calculate your State Pension age or bus pass age - you can do one, then check the other
- Once the State Pension age option is selected, input your date of birth
- Next, select whether you're a man or woman
- The final screen reveals the exact date that you will reach State Pension age
It’s also possible from this screen to get information on when you could become eligible for Pension Credit, get a pension forecast or receive other State Pension information.
Check your State Pension age on the GOV.UK website here.
To keep up to date with the latest State Pension news, join our Money Saving Scotland Facebook page here, follow us on Twitter @Record_Money, or subscribe to our newsletter which goes out Monday to Friday - sign up here.
READ NEXT
Older people living in 25 countries may be due winter heating bill help of up to £600
Couples who want comfortable retirement lifestyle will need an annual income of more than £54,000
State Pension payments of over £2,000 each month for older people living in five European countries
Older people making new claim for Pension Credit could also qualify for £900 cost of living payment
State Pension payments after a spouse or partner dies - inheritance rules and who can claim
