Millions of Brits to have to wait longer for retirement under state pension plan age increase
The state pension age rise is expected to come forward by several years, meaning millions of Brits will have to wait slightly longer before they're eligible for their government benefits.
Under current legislation the plan is for the age at which a person is eligible for state pension, often referred to as 'retirement age', to rise to 68 at some point between 2044 and 2046.
This was laid down in the Pensions Act 2007, but the financial and political landscape has changed somewhat since then and for years the noise around state pension age has been on bringing the increase forward.
According to The Times, the Treasury have told the Office for Budget Responsibility (OBR) that 'current policy' is to bring the window forward to between 2037 and 2039.
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The OBR said in a statement: “We assume that the state pension rises to 68 in 2037-39. The Treasury has confirmed to us that this is the government’s current policy position, rather than the legislated increase set in the Pensions Act 2007.”
That means around five million Brits currently aged between 49 and 55 who thought they'd be retiring at the age of 67 will now have to wait another year before they're eligible for full state pension.
Bringing forward the pension age rise is expected to save the government around £6 billion a year.
Successive governments have been reviewing the situation as it was back in 2017 when Theresa May was prime minister when a review first recommended bringing forward the 68 age rise to between 2037 and 2039.
May's Conservative government accepted the review's findings and since then it's been something successive governments have acknowledged they'd be changing, though hadn't yet set out a full timetable for when that would be.
A spokesperson for the Treasury told the Times bringing forward the state pension age rise was not 'new information'.
"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," they said.
"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."
Research from the Resolution Foundation last year found that many Brits were retiring before they hit state pension age, with economic inactivity (people out of work who aren't looking for a job) rising among Brits in their 50s and climbing further as they get older.
By the early 60s around 40 percent of Brits are economically inactive, and by 65 this rises up to almost 60 percent.
70 percent of Brits are economically inactive by the time they hit the current state pension age of 66, and as you might expect this continues to climb as the age increases.
Joe Harker