Britons face having to work until they are 70 to get the state pension if they were born since 1979, a former minister suggested on Thursday.
Steve Webb, an-ex pensions minister, raised this prospect for people in their early 40s or younger after trawling through new documents on the future of the State Pension age.
He tweeted: “Having looked at the reports just published, the most significant element might be the idea of *capping* spending at (say) 6% of GDP.
“This means pension age of at least 69 for anyone born since 1979, and probably 70 or more in due course.
“Really not keen on this!” added Mr Webb, now a partner at financial, actuarial and business consultants Lane Clark & Peacock.
His comments came after the Government said a rise in the state pension age to 68 could be delayed although no decision will be taken until after the next General Election.
Having looked at the reports just published, the most significant element might be the idea of *capping* spending at (say) 6% of GDP. This means pension age of at least 69 for anyone born since 1979, and probably 70 or more in due course. Really not keen on this!
— Steve Webb (@stevewebb1) March 30, 2023
Work and Pensions Secretary Mel Stride said he agreed the planned increase in the state pension age from 66 to 67 should occur between 2026 and 2028, noting this has been legislated for since 2014.
MPs heard an independent report has recommended the rise from 67 to 68 should take place between 2041 and 2043, four years later than previously accepted by the Government but still earlier than set out in legislation.
Mr Stride said the current rules for the increase to 68 “remain appropriate” but also noted he is “mindful a different decision” might be needed once a further review is conducted within two years of the next Parliament.
This review would assess various factors including life expectancy and public finances. The next election is expected to take place in 2024.
Mr Stride, making a statement to the House of Commons, said: “As a society we should celebrate improvements in life expectancy, which has risen rapidly over the past century and is projected to continue to increase.
“Since the first state pension age review was undertaken in 2017, however, the increase in life expectancy has slowed.”
He added: “Given the level of uncertainty about the data on life expectancy, labour markets and the public finances, and the significance of these decisions on the lives of millions of people, I am mindful a different decision might be appropriate once these factors are clearer.
“I therefore plan for a further review to be undertaken within two years of the next Parliament to consider the rise to age 68 again.
“This will ensure that the Government is able to consider the latest information, including life expectancy and population projections, that reflect the findings of the 2021 Census data, the latest demographic trends, and the current economic situation.
“We will also be able to consider the impact on the labour market of the measures we have announced to increase workforce participation and any other relevant factors.
“The current rules for the rise from 67 to 68 therefore remain appropriate and the Government does not intend to change the existing legislation prior to the conclusion of the next review.”
Mr Stride said Conservative peer Baroness Neville-Rolfe, who conducted one of the reviews, was unable to take into account the long-term impact of “challenges” including the Covid-19 pandemic and inflation linked to Russia’s renewed invasion of Ukraine.
For Labour, shadow work and pensions secretary Jonathan Ashworth said stalling life expectancy rates are a “damning indictment” of the Government.
He said: “Today’s announcement that they are not going ahead with accelerating the state pension age is welcome, and it is the right one.
“But it is the clearest admission yet that a rising tide of poverty is dragging life expectancy down for so many, and stalling life expectancy, going backwards in some of the poorest communities, is a damning indictment of 13 years of failure which the minister should have acknowledged and apologised for today.”
Mr Ashworth claimed that previous work and pensions secretaries had said it was “explicit Government policy to bring forward the increase in the state pension age to 68 between 2037 and 2039”.
He asked the minister: “Can he confirm whether the review that he has announced for the future will still consider bringing forward an increase in the state retirement age to 2037? Does that remain the Government’s policy ambition or is that now abandoned?”
Mr Stride, in his reply, said: “Given that we have made a commitment to a 10-year notice period, that would suggest that if the next review and I say if, it is for others to decide this in the course of time, we are say in 2026, that would indeed bring those dates as possible, but of course it wouldn’t preclude decisions being taken for dates further out than 2037-39.”
Mr Stride claimed pensioner poverty “has improved right across the board since 2009/10” adding this was “not least because of the policies pursued by this Government”.
Across the Channel, French President Emmanuel Macron has faced weeks of violent protests after announcing deeply unpopular plans to raise the pension age from 62 to 64 by 2030.
France has the lowest pension age in the OECD.
The government in Paris rejected unions’ demand to suspend and rethink the pension bill, infuriating labour leaders who said the government must find a way out of the crisis.
Millions of people have been demonstrating and joining strike action since mid-January to show their opposition to the bill. Unions said the next nationwide day of protests would be on April 6.
