Millions may have to hold up longer to get their state annuity, the Government has revealed.Until this announcement, the state pension age was proposed to raise from 67 to 68 in the years of 2044 and 2046.
Until this announcement, the state pension age was proposed to raise from 67 to 68 in the years of 2044 and 2046.
Presently, there is an arrangement to change this timetable, with the increase occurring in the years of 2037 and 2039 instead.
The Department for Work and Pensions put this down to need – due to the expanding financial weight of paying out state annuities to retirees who are living for ever longer in retirement.
Steve Webb, chief of policy at life firm Royal London, said “The government is right not to have left this increase in the pension age until the mid-2040s. Without this decision, people of working age would have faced a heavy tax burden.”
The six million affected individuals are aged between of 39 and 47 today.
Under the past plans, those born on April 6, 1978, will get state benefits at the age of 68.
Given the new arrangement, those born on April 6, 1970, and April 5, 1978, will also be included. This includes both men and women.
Presently, the state benefits age is 65 for men and 64 for women. The latter will keep rising every few months until the age will equalise at 65 for men and women in 2018.
Although, this is still a Government’s plan, and will need to be voted before it becomes law.
The Conservative party has a thin part in the House of Commons, which could be a problem for such a disputable law.
However, the Government has said the enactment affirming the new timetable doesn’t need to be set up until 2023 – one year after the scheduled general election.
Tom Selby, a senior analyst at Sipp provider AJ Bell, said: “This is simply kicking the can down the road. At some point, politicians will have to make difficult choices about the state pension, particularly if life expectancy continues to increase.”
The Labor Party has said it would review age increments past 66, however, whether it is ready to solidify the state benefits age will rely on many factors.