Treasury Plans to Accelerate State Pension Age Increase
Treasury officials have informed the Office for Budget Responsibility (OBR) that the state pension age rise to 68 should be brought forward by at least seven years, impacting millions of Britons currently aged between 49 and 55. The current legislation sets the gradual increase to 68 between April 2044 and April 2046, affecting those born between April 1977 and April 1978. However, the new proposal would see the threshold reached by 2037-2039.
Five Million People Affected by Proposed Change
Around five million people now aged between 49 and 55 would be required to work an additional year as a result of the accelerated timeline. According to Sir Steve Webb, a former Pensions Minister under the Conservative-Liberal Democrat coalition, the Government is likely to confirm the changes after the ongoing pension review concludes. He told The Times: "Anyone checking the Government's pension calculator would assume that the pension age won't be rising to 68 before the mid-2040s. But within Government it is widely expected that the age increase will take place seven years earlier than the law currently says. That means around five million people will lose around £12,500 that they might otherwise have been entitled to."
Urgent Call for Legislation
Sir Steve Webb added: "Ministers are going to have to be clear about this soon. If they want to increase the pension age in 2037 they are to have to legislate on this next year." Paul Johnson, former head of the Institute for Fiscal Studies, echoed the need for swift action, stating: "For many decades the retirement age has not kept pace with increasing life expectancy and these reasonably modest changes to the pension age will help the Government’s long-term fiscal position. However, the Government will also have to look at other areas like the triple lock to ensure that state pension is sustainable in the longer term."
Treasury Defends Position
A Treasury spokesman clarified that the decision to bring the pension age forward was not "new information," noting: "The previous Government publicly committed to raising the state pension age to 68 between 2037 and 2039 and the OBR has reflected that position for years. The state pension age review, which will consider what the timetable for state pension age should be in the coming decades, is currently under way and we cannot pre-empt the outcome."
