Retirement at 68 brought forward
Gauke accused of ‘sneaking out’ pension change
The Government has been accused of trying to head off criticism over another change to the state pension age by announcing it on the day that parliament broke up for the summer recess.
Work and Pensions Secretary David Gauke told the Commons that the extension to the state pension age to 68 will be brought forward by seven years.
It will be extended from 67 by one year from 2037. Those currently under 47 will have to work longer before receiving their state pension.
Mr Gauke said the Government had to “face up to this long-term challenge, not pretend it doesn’t exist.”
In a media statement, the government said “those affected by this proposed timetable will on average still receive more state pension over their lifetime than generations before them.”
The Government had already committed to increasing the state pension age from 65 to 66 by October 2020. By 2028 this was set to rise to 67 and then 68 by 2046.
Six million men and women aged between 39 and 47 will have to wait a year longer to get their state pension as a result of the change.
The announcement comes in the same week as a new report from the Institute of Health Equity at University College London confirmed that life expectancy rises in England began to stall since 2010.
Keir Greenaway, GMB National Pensions Organiser, said: “The Tories sneaky increase to state pension age, clobbering six million people, comes in the same week we are told that life expectancy rises are grinding to a halt.
“This is the double bite of austerity – workers are expected to work longer and could now be at risk of dying sooner.
“GMB sees this as a complete disregard for working people from an out of touch Government – and a Cabinet of millionaires who will never know what it is like to have to rely on a state pension.
“This week’s report showing a stall in life expectancy rises since the Conservatives took power in 2010 should alarm us all. They cannot be trusted to bring stability in retirement for working people.”
Kirsty Blackman, the SNP’s Depute leader at Westminster, warned that the further increases in the state pension age could have a hugely disproportionate impact on Scotland, as parts of Scotland have low life expectancy due to historic and deeply ingrained public health challenges.
She said: “It’s clear why the UK government held back until after the election and did not publish this on the legal date it was supposed to on the 7 May, as this would have undoubtedly lost the Tory party even more seats than they did. What we have witnessed today is an example of Tory trickery at its very worst.”
David Newman, head of pensions at Close Brothers Asset Management, said: “State support is being withdrawn from future retirees at an increasing rate and this move will add further unwanted uncertainty for those planning for retirement. It’s vital that savers understand at what age state support will now kick in given changes over recent years, so that they can plan ahead.”
Steven Cameron, pensions director at Aegon, said: “It’s ironic that the Government is proceeding with an accelerated increase in the state pension age days after statistics show improvements in life expectancy may be levelling off, meaning this increase may be less justified on affordability grounds.
“A blanket increase in state pension age will be particularly concerning for those who through health concerns, job pressures or lack of employment opportunity simply can’t keep working into their late 60s.
“Requiring everyone to wait till an ever increasing age to draw a state pension is inflexible and increasingly out of sync with private pensions which can be taken from as early as age 55 and offer people a flexible and personalised transition into retirement.
“The clear message is that anyone who wants more choice over how and when they retire can’t rely solely on a state pension and should be reviewing their workplace or private pension provision.”
Old Mutual Wealth head of retirement policy Jon Greer, said: “Government deserve some credit for biting the bullet and taking the unpopular decision to increase the state pension age. However, it appears they were not convinced that more creative solutions were administratively viable.
“The ‘universal’ state pension age we currently operate under means that retirement age applies equally to everyone. While it is possible to delay retirement and take a higher pension in exchange, the same flexibility does not exist in reverse.”
The government has accepted the recommendation of former CBI director John Cridland whose report said bringing forward the state pension age increases would cut state pension spending as a proportion of GDP by 0.3% compared to the Office for Budget Responsibility projection.
The report also recommended scrapping the triple lock.
Mr Greer said: “Today’s announcements are interesting in the context of the decision to maintain the triple lock, which causes the state pension to ratchet up ahead of inflation and earnings.
“The Conservatives had planned to end the triple lock, but conceded it in their negotiations with the DUP. So on the one hand they are maintaining state pension increases for today’s retirees, while at the same time telling people age 47 and under that they will have to work longer before receiving their state pension.”
Blackford challenges PM on women’s state pensions
SNP Westminster Leader Ian Blackford asked Theresa May if she believes her government has delivered pensions fairness for women who, like her, were born in the 1950s.
Speaking during the last Prime Minister’s Questions before the summer recess, Mr Blackford said it seems the Prime Minister can ‘shake the money tree’ when it suits her.
The SNP has long campaigned for the UK government to step up and help WASPI women (Women Against State Pension Inequality) who have been affected by changes to the state pension age and are due to lose out financially.
Mr Blackford said: “For the government to say they can’t afford to pay these women what they are owed is laughable. Theresa May can find a billion pounds to cling on to power, but can’t find the money to give women the pensions that they are due.
“These women are guilty of nothing. They have had the misfortune of being female and being born in the 1950s and live under this UK government who refuses to do the right thing.
“This is an issue of equality. The UK government must take responsibility and do the right thing for these women who are missing out on their pension.
“Can the Prime Minister end the injustice for these women who are missing out on their pension – before she, herself thinks about retiring?”