A government cabinet minister pointed to the 'pretty hairy' state of public finances as he admitted the state pension age could be raised. Work and Pensions Secretary Mel Stride confirmed a decision is expected to be made within the next six months.
Currently, the state pension age for men and women is 66, but this is set to rise to 67 by 2028. But The Mirror reports it could rise to 68 as early as 2033, much sooner than the Government previously said it would, by 2039.
Raising the age would cost millions of people currently aged between 51 and 57 up to around £10,000 each. Mr Stride yesterday suggested the pension age could go up even though life expectancy is not increasing.
He told MPs: “I think there are various moving parts in assessing where we should go with the state pension age.
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“One of them is life expectancy and more precisely, what proportion of your life should we expect people to have in retirement as opposed to not in retirement?
“Another is the cost, and if you look at the consequences of us living longer, and you look at that, for example, as expressed in the financial stability report that the OBR (Office for Budget Responsibility) produces every year, where it casts out 50 years and says ‘what are the public finances likely to look like given the demographic change that’s going on?’, the cost of pensions being an element within that, it all gets pretty hairy.
“So there is also certainly this other element of ‘what’s the cost going to be’? I think there are other issues – intergenerational fairness, when you look at the split between how long somebody works to support those that are not working.”
A previous review of the state pension age in 2017 suggested that retirement should make up a third of a person’s life. Asked if ministers were “seriously thinking” of reducing this, Mr Stride said it was “a factor to consider”.
He said he could not be drawn on this, but added that “clearly, that metric is a very important measure”. Mr Stride said the findings would be made public before May and "some time in the New Year".
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