Newspaper reports suggesting that the state pension age could rise to 68 sooner than expected are an example of the Prime Minister “playing with political fire,” according to one pension expert.
It’s been suggested the planned rise to 68 could be brought forward to the 2030s.
At present the current retirement age is set to rise to 67 by 2028, and then to 68 by 2046. But The Sun newspaper has reported that the Treasury is said to want the change to 68 to come in as early as 2035 — affecting those who are 54 and under today.
The paper said a possible announcement of the change could come in March’s Budget.
Tom Selby, head of retirement policy at AJ Bell, said: “Rishi Sunak will be playing with political fire if he decides to accelerate the planned increase in the state pension age to 68.
“The latest official data suggests average life expectancy improvements – the main justification for state pension age increases – have gone into reverse since the pandemic.”
He said that from the Treasury’s perspective, bringing forward the planned increase could be a huge money spinner, likely raising tens of billions in revenue – funds that are desperately needed in the wake of the pandemic and the costly energy support package.
Mr Selby added: “The big question is whether Number 10 agrees this Exchequer boost is worth the inevitable pain at the ballot box.”
He said that telling millions of people they will have to wait longer for their pension might prove the final nail in the coffin of the Conservatives’ hopes of winning the next general election.
The timetable for increasing the state pension age to 67 by 2028 is not expected to be affected by any Government review. The Government has also previously said it will give 10 years’ notice of any changes to the state pension age.
That means the earliest any increase in the state pension age beyond 67 could be brought in is 2033.
Jenny Holt, managing director for customer savings and investments at Standard Life, part of Phoenix Group said: “The state pension makes up 42% of welfare spending making it a significant financial commitment and its importance to most people’s retirement also can’t be under-estimated.
“The basic state pension will shortly rise to £8,133 a year and bringing forward planned age increases, potentially to end of the 2030s, would represent a significant change to the retirement plans of many people – particularly those planning to retire early or who may not be able to work up to state pension age.”
The full flat-rate state pension is currently worth £185.15 per week in 2022/23 and is set to rise by 10.1% to £203.85 per week in April.
