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| State pension age review: Young adults will have to work until their mid-70s before qualifying, experts warn | State pension age review: Young adults will have to work until their mid-70s before qualifying, experts warn |
| (6 months later) | |
| Young adults will have to work until their mid-70s before they qualify for a state pension, financial experts warned as the Government launched a review of the pension age. | Young adults will have to work until their mid-70s before they qualify for a state pension, financial experts warned as the Government launched a review of the pension age. |
| The previous state pension age of 60 for women has been rising until it reaches the male level of 65 in two years’ time. It will increase for both sexes to 66 between 2018 and 2020 and to 67 by 2028. | The previous state pension age of 60 for women has been rising until it reaches the male level of 65 in two years’ time. It will increase for both sexes to 66 between 2018 and 2020 and to 67 by 2028. |
| After then it could continue to rise sharply to prevent the cost of taxpayer-funded support for pensioners becoming unaffordable. Population projections suggest it could increase to 68 in the mid-2030s, 69 in the late-2040s and 70 in the early-2060s. | After then it could continue to rise sharply to prevent the cost of taxpayer-funded support for pensioners becoming unaffordable. Population projections suggest it could increase to 68 in the mid-2030s, 69 in the late-2040s and 70 in the early-2060s. |
| The former CBI director general John Cridland, who will head the review, will examine changes in life expectancy and changes in society. Its aim is to “help ensure the state pension remains sustainable for generations to come”, the Government said. | The former CBI director general John Cridland, who will head the review, will examine changes in life expectancy and changes in society. Its aim is to “help ensure the state pension remains sustainable for generations to come”, the Government said. |
| His review will not affect the planned pension age timetable to April 2028. | His review will not affect the planned pension age timetable to April 2028. |
| Tom McPhail, head of retirement policy at financial services company Hargreaves Lansdown, said: “We fully expect state pension ages to go up faster than currently planned, and those joining the workforce today are likely to find themselves waiting until their mid-70s to get a payout from the state system. | Tom McPhail, head of retirement policy at financial services company Hargreaves Lansdown, said: “We fully expect state pension ages to go up faster than currently planned, and those joining the workforce today are likely to find themselves waiting until their mid-70s to get a payout from the state system. |
| “This is simply a function of the big jumps we continue to see in life expectancy, which the state pension can’t hope to support without costs spiralling out of control.” | “This is simply a function of the big jumps we continue to see in life expectancy, which the state pension can’t hope to support without costs spiralling out of control.” |
| The 2014 Pensions Act requires the state pension age to be reviewed during each Parliament. This will be the first such review to take place. | The 2014 Pensions Act requires the state pension age to be reviewed during each Parliament. This will be the first such review to take place. |
| The pensions minister, Baroness Altmann, said: “As our society changes, it is only right that we continue to review state pension ages and take into account the relevant factors to make sure that the state pension is sustainable and affordable for future generations.” | The pensions minister, Baroness Altmann, said: “As our society changes, it is only right that we continue to review state pension ages and take into account the relevant factors to make sure that the state pension is sustainable and affordable for future generations.” |
| Owen Smith, shadow work and pensions secretary, said the Government had a record of not being straight with people over pension policy. He added: “people are right to worry that the terms of this review may suggest that the Tory Government is set to speed up rises in the state pension age, throwing into chaos the retirement plans of millions of British workers. | Owen Smith, shadow work and pensions secretary, said the Government had a record of not being straight with people over pension policy. He added: “people are right to worry that the terms of this review may suggest that the Tory Government is set to speed up rises in the state pension age, throwing into chaos the retirement plans of millions of British workers. |
| Mr Cridland, who is due to report next year, said: “Whatever decisions they make, the Government needs to make sure they communicate them very, very clearly so individuals can plan their retirement savings with some certainty about what they will get from the state, and when they will get it.” | Mr Cridland, who is due to report next year, said: “Whatever decisions they make, the Government needs to make sure they communicate them very, very clearly so individuals can plan their retirement savings with some certainty about what they will get from the state, and when they will get it.” |
| Click here to download a free guide on "easy to avoid pension mistakes", from Independent Partner, Hargreaves Lansdown. |