The UK’s Department for Work and Pensions (DWP) said it will move up the pension age increase to 68 to between 2037 and 2039, instead of 2044 and 2046 as previously proposed.
“It is vitally important for the future of the state pension system that we take account of increasing life expectancy,” said the DWP. “Failing to act now in light of compelling evidence of demographic pressures would be irresponsible and place an unfair burden on younger generations.”
The change will affect everyone born between April 6, 1970, and April 5, 1978. No one born on or before April 5, 1970, would see a change to their current proposed pension age.
Despite this change, the DWP said that those affected by this proposed timetable change will still receive, on average, more state pension over their lifetime than the generations before them.
In support of its decision, the DWP cited the UK’s Office for National Statistics, which reported that the number of people older than the state pension age is expected to grow to 16.9 million in 2042 from 12.4 million in 2017.
According to the DWP, when the modern state pension was introduced in 1948, a 65-year-old could expect to spend 13.5 years in receipt of it, which is the equivalent to 23% of their adult life. In 2017, a 65-year-old can expect to live for another 22.8 years, or 33.6% of their adult life.
“As life expectancy continues to rise and the number of people in receipt of state pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations,” said David Gauke, secretary of state for the DWP. “These changes will give people the certainty they need to plan ahead for retirement.”
However, Unite, the UK’s largest union, said the proposal to move up the timetable would be making workers pay for a failed economic policy.
“This is a kick in the teeth for millions of workers who now face working up to a year longer before they receive their state pension,” said Gail Cartmail, assistant general secretary for Unite.
Cartmail also said that although the union is opposed to any increase in the state pension age, if one has introduced, it believes an individual’s state pension age should be based on the type of work they performed during their career.
“In industries such as construction, the majority of the workforce are already forced out of their roles prior to 65 because of ill health and injury,” said Cartmail. “This increase will result in even more workers being forced into poverty, too old to work but too young to claim a pension.”
The moving up of the timetable, however, is not set in stone. The DWP said that because “this is a big decision with significant consequences,” it will carry out a further review before moving up the rise in pension age “to enable consideration of the latest life expectancy projections, and to allow us to evaluate the effects of current rises in state pension age.”
Tags: Britain, Pension, Retirement Age