State pension warning as ‘controversial’ review on raising age to 68 looms

State Pension age could be reviewed due to pandemic says expert

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State pension age has been rising incrementally for a number of years now. Traditionally, it was set at 60 for women and 65 for men.

However, a process of equalisation was reached for both sexes by 2018, meaning the retirement age was 65 for all.

Subsequently, the state pension age increased to its current level of 66.

But further changes are afoot, and a review could see these occur sooner rather than later.

The Government has now officially launched a review and consultation into state pension age changes.

Under its current timetable, the state pension age will gradually rise to 67 for those born on or after April 1960.

After this point, a gradual rise to 68 between 2044 and 2046 was planned.

The consultation, however, will consider whether this all-important rise to 68 should be sped up.

The Government states: “The first Review of state pension age was undertaken in 2017 and concluded that the next Review should consider whether the increase to age 68 should be brought forward to 2037-39 before tabling any changes to legislation.”

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It would mean state pension age changes from 67 to 68 could be brought forward by seven years.

The reason for the review is due to the number of people over state pension age increasing.

This is as a result of an ageing population and people on average living longer.

The Government therefore needs to manage the costs of the state pension to ensure fairness for future taxpayers.

However, experts have warned the review is set to bring with it major controversy.

Andrew Tully, technical director at Canada Life, said: “Any debate around the increase to the state pension will inevitably be controversial. 

“Life expectancy varies hugely across the UK so any change isn’t straightforward. 

“People living in poorer areas are also much more likely to remain in work while waiting to become eligible for the state pension, so any change will inevitably have a more fundamental impact on some.”

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Mr Tully did go on to acknowledge access to the state pension age at different ages would be a complex process.

Other experts have argued this approach may also create resentment amongst groups of older people.

Mr Tully concluded: “All in all there are no easy answers and it needs to form part of a wider debate around levelling up, increasing life expectancy across all regions in the UK, and increasing private pension savings through auto-enrolment. 

“Clear communication of any proposed changes will be essential for success, ensuring people understand how they will be impacted and with plenty of time to plan for their future.”

The Government has called for responses to the independent consultation, providing specifics and referencing evidence and data where possible.

Individuals can send written responses to the email address: [email protected] or by post.

The closing date for written submissions is April 25, 2022.

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