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Latest NewsEconomics, government & businessDepartment for Work and PensionsPensions

Ministers put off decision to increase pension age to 68

by Adam McCulloch 30 Mar 2023
by Adam McCulloch 30 Mar 2023 Photo: PA Images/Alamy
Photo: PA Images/Alamy

A decision to increase the state pension age to 68 has been put back, the government has announced.

The first cohort to work to 68, under current plans, will be those born on or after 5 April 1977. The 2017 State Pension Review suggested expanding this to include those born in the late 1960s.

But the latest review stated the pension age would not be changed until a further review was carried out.

A decision is now expected in 2026, after the next general election.

By law the government is required to examine planned changes to the system every six years.

A recent King’s Fund report found life expectancy for retiring Britons was now two years lower than when the government last reviewed the state pension age in 2017.

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Labour said increases in life expectancy were being “dragged down” by a “rising tide of poverty”.

The latest State Pension Review incorporated the findings of an independent study by Baroness Neville-Rolfe which examined what factors the government should take into account when setting the pension age. This recommended the planned rise to 67 should take place 2026-8.

A further review into raising the state pension age has been commissioned by work and pensions secretary Mel Stride.

This study was necessary, said Stride, because the previous review had not been able to take into account the Covid pandemic and global inflation caused by Putin’s war Ukraine.

The new review will report within two years of the new parliament, he added.

Labour supported the government’s position, but shadow work and pensions secretary John Ashworth said the government had last year said bringing forward an increase in state pension age “was absolutely necessary for the long term sustainability of the public finances”.

It looks like the government just wants to keep asking the same question until it gets the answer it wants” – Paul Nowak, TUC

He added: “Now it turns out with general election only a year away the and the government trailing so badly in the polls, not raising the state pension age is not so reckless after all.”

In France, proposals to raise the pension age to 64 have caused major civil unrest.

Next week, the amount of state pension paid in the UK will increase by 10.1% in line with the rising cost of living, as announced in November 2022. This means it will be worth £203.85 a week (up from £185.15) for the full, new flat-rate state pension (for those who reached state pension age after April 2016).

TUC general secretary Paul Nowak said the delay over the pension age rise was “a much needed climbdown” but no cause for celebration given by the fall in life expectancy.

He added: “The promise of yet another review after the next election is a worry for workers – it looks like the government just wants to keep asking the same question until it gets the answer it wants.

“The real problem is that ministers are failing to deal with the health inequalities that lead to falling life expectancy in poor areas, and that mean many in low-paid jobs are already unable to work to state pension age.”

Passing the buck until after the election could postpone implementing policies that address the real issues of work and health” – Catherine Foot, Phoenix Insights

Catherine Foot, director of Phoenix Group thinktank Phoenix Insights, said the increase in age was necessary for the sustainability of public finances given the “huge numbers of our ageing population reaching state pension age.” She warned: “Passing the buck until after the election could postpone implementing policies that address the real issues of work and health which cause many on low incomes to fall out of work years before their state pension age, and with little private wealth to support their income.

Foot added: “Around one in three people who would be affected by bringing forward the increase are not confident about working until their planned retirement, with concerns around health, ageism, motivation and skills drivers of this.

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“These people will be badly affected by any future changes, finding themselves at the mercy of a benefit system that is significantly less generous to working age people than it is to those above the state pension age. This group need additional targeted support or we will see a worsening of pre-retirement poverty.”

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Adam McCulloch

Adam McCulloch first worked for Personnel Today magazine in the early 1990s as a sub editor. He rejoined Personnel Today as a writer in 2017, covering all aspects of HR but with a special interest in diversity, social mobility and industrial relations. He has ventured beyond the HR realm to work as a freelance writer and production editor in sectors including travel (The Guardian), aviation (Flight International), agriculture (Farmers' Weekly), music (Jazzwise), theatre (The Stage) and social work (Community Care). He is also the author of KentWalksNearLondon. Adam first became interested in industrial relations after witnessing an exchange between Arthur Scargill and National Coal Board chairman Ian McGregor in 1984, while working as a temp in facilities at the NCB, carrying extra chairs into a conference room!

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