State pension age could rise to 68 earlier than expected

State Pension: Expert outlines criteria to qualify

We use your sign-up to provide content in ways you’ve consented to and to improve our understanding of you. This may include adverts from us and 3rd parties based on our understanding. You can unsubscribe at any time. More info

Mel Stride, the new work and pensions secretary, has suggested the state pension age could be raised as public finances struggle. The DWP secretary suggested the state pension age could increase, even though life expectancy rises have slowed – with a decision on the matter pending.

Mr Stride told MPs: “There are various moving parts in assessing where we should go with the state pension age.

“One of them is life expectancy and more precisely, what proportion of your life should we expect people to have in retirement, as opposed to not in retirement?

“Another is cost, and if you look at the consequences of us living longer, and you look at that, for example, as expressed in the financial stability report that the OBR (Office for Budget Responsibility) produces every year, where it casts out 50 years and says, ‘What are the public finances likely to look like given the demographic change that’s going on?’.

“The cost of pensions being an element within that, it all gets pretty hairy.”

The DWP secretary also suggested issues such as intergenerational fairness would also be considered.

At present, the state pension age will rise to 67 by 2028, and the Government has previously stated it may then go up to 68 by 2039.

Speculation has risen recently that the increase to 68 could be accelerated – even as early as 2033.

However, raising the state pension age would undoubtedly have implications for those nearing retirement.

DON’T MISS
Pension Credit backlog uncovered – 60,000 claims wait to be processed [LATEST]
State pension warning as thousands more set to pay income tax by 2030 [UPDATE]
‘Frozen’ pensioners ‘didn’t know’ their state pension wouldn’t rise [EXCLUSIVE]

Such a move would cost millions of people currently between the ages of 51 and 57 up to £10,000 each, according to Sir Steve Webb.

Chancellor Jeremy Hunt recently confirmed the results of a review are set to be published in the coming months.

In his Autumn Statement, he said: “The Government’s review of the state pension age will be published in early 2023.”

Mr Stride stated the review findings would be shared “sometime in the New Year”.

In accordance with the law, the latest review must be published by May 7, 2023.

The Government has said the review is taking place due to an ageing population.

The number of people over state pension age is increasing, with a growing population and people “on average living longer”.

The announcement of the review continued: “The Government needs to make sure that decisions on how to manage its costs are, robust, fair and transparent for taxpayers now and in the future. 

What is happening where you live? Find out by adding your postcode or visit InYourArea

“It must also ensure that as the population becomes older, the state pension continues to provide the foundation for retirement planning and financial security.”

The review is set to consider a wide range of evidence, such as the latest life expectancy data, labour market changes, and future expenditures.

The UK Government stated during the passage of the Pensions Act 2014 that the state pension age review would consider evidence from across the UK.

The review will therefore consider differences across countries and regions.

This will include Northern Ireland, it was added.

It will also consider effects for individuals with different characteristics and opportunities, including people at risk of disadvantage.

Source: Read Full Article