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People in their 40s may have to work until they are 69 or 70 if the government wants to stay within spending guidelines.
Yesterday’s review by Baroness Neville Rolfe recommended limiting national pension spending to 6% of GDP.
If implemented, the pension age will rise from 68 to 69 between 2046 and 2048.
The government did not rule out making such changes.
The first generation, who will work until age 68, is currently defined as the generation born after April 5, 1977, but a 2017 government review recommends that the generation born in the late 1960s be included in the new retirement age. are doing.
Yesterday, Labor Pensions Secretary Mel Stride confirmed that the plan has been postponed until after the next election, and the pension age will not be changed until another review is completed.
“Within two years of the next Congress, we will have a further review to reconsider raising the age to 68,” Stride told Commons.
“This will allow governments to consider up-to-date information such as life expectancy and population projections.”
The decision to discontinue the planned changes was driven by declining life expectancy.
Increasing the first cohort to retire at 68 has been shelved, but the legislated timetable remains unchanged, with the pension age expected to rise to 67 by 2028 and 68 by 2046. means.
A new Congress two-year review in 2026 will take into account 2021 Census data and clearer information about the impact of the pandemic on long-term life expectancy, but in principle changes should be made as early as 2036. may recommend.
The UK spends 4.8% of GDP on pensions, projected to reach 8.1% by 2071.
This week, there were demonstrations in France over President Emmanuel Macron’s proposal to raise the retirement age in his country to 64. France now spends her 14% of GDP on pensions.
Former pensions minister Sir Steve Webb said a “drastic change” to spending caps would “stick in the tail” of a review of pension policy.
Sir Steve welcomed the government given the drop in life expectancy in recent years, but added:
“If we adopt the idea of capping the proportion of national income spent on pensions, this means that the pensionable age will be raised rapidly, including raising it to 69 by the end of the 2040s. .
“This would be a drastic shift in policy that will likely mean that today’s young workers face pensions after age 70.”
Jonathan Ashworth, secretary of shadow jobs and pensions, said the stalling in life expectancy was a “disgusting indictment” for the government.
He said the decision to delay raising the pension age was “welcome”, but added:[It] It is the clearest acknowledgment to date that rising poverty is pulling down life expectancy for so many people, and the decline in life expectancy in some of the poorest communities is 13 years of failure. It’s a disgusting accusation. “
The Fiscal Institute says that not introducing an increase in the public pension age from 67 to 68 from the late 2030s could cost Treasuries around £8bn to £9bn a year. suggests.
A spokesperson for No10, when asked about the 6% cap, said: To make a decision, we carefully consider data and evidence, including two independent reports. “