A rise in the state pension age from 2020 is inevitable, but will only be acceptable to people if offset by more generous retirement benefits, the work and pensions secretary said today.
In a speech to the Work Foundation, John Hutton said that employees now aged 50 or younger will have to wait longer before drawing their state pension because of the rise in life expectancy.
In November 2005, Lord Turner’s Pensions Commission proposed a bigger basic state pension, indexed to earnings rather than prices, and a ‘National Pensions Savings Plan’ with compulsory employer contributions in return for an increase in the state pension age from 65 to at least 68 by 2050.
Hutton today pinpointed 2020 as the date at which state pension age will be equalised for men and women at 65.
“My view is that some increase in the state pension age from 2020 is now inevitable, but any rise will only be acceptable to people if it comes as part of package to improve pension provision in other key areas that Lord Turner’s report addresses,” he said.
The government will attempt to address business concerns about the proposed National Pensions Saving Plan at a summit with representatives from the savings industry and employers’ groups on 28 February.