Autumn Statement 2013: State pension age rise

Autumn Statement 2013: State pension age rise

Chancellor George Osborne has confirmed that planned increases to the state pension age will be brought forward by a decade.

The state pension was scheduled to increase from 65 to 68 in 2046 but the increase will now be introduced in the mid 2030s. It could then increase to 69 in the 2040s. Workers currently in their 20’s now realistically face the prospect of working until they are 70.

The change should only impact workers in their forties and below and that nobody, currently aged over 50, will have to work beyond 68. Osborne added that young people needed to be sure that they would get a 'proper pension' when they retire.

Going forward the state pension age will also be linked to increases in life expectancy.

Tom McPhail, head of pensions research at Hargreaves Lansdown said: “This was always going to happen, it was just a question of how and when it was unveiled. Currently, the SPA will rise to 67 by 2028 but will then pause before rising to 68 between 2044 and 2046. This was already widely acknowledged as being too late and too slow.”

He added: “Given current low levels of private savings and improvements in life expectancy, it was unrealistic for those in their 40s and younger to expect that they wouldn’t see their State Pension Age rise again above age 67. In reality, many in work today are already unlikely to be able to afford to retire until their 70s, irrespective of when their state pension falls due.”

Pensions campaigner Dr Ros Altman said that the changes provided younger workers with an opportunity: "Rising state pension age should not be considered a penalty on the young.  It is an opportunity to embrace the benefits of all the advances in medical and work practices which are enabling most of us to have a longer, fitter working life.  

"Later retirement is a realistic response to the great news that people are living longer, healthier lives and that retirement is not all it is cracked up to be.  Romantic notions of retirement being a wonderful period of long holidays, lazy days and playing golf are simply not realistic.  With just a state pension and a small amount of private savings, retirement is often a question of struggling to make ends meet. "

However Martin Bamford, IFA at Informed Choice said many workers will not be healthy enough to work until they are 70. He said: "Working for longer in retirement is not a solution to a rising state pension age. Often people will find they are unable to keep working, due to poor health or the lack of suitable employment. With rising levels of obesity and chronic health problems, it is delusional to believe you will definitely be able to keep working into your 60s or 70s, as a way of coping financially with a later retirement age."

In the speech Osborne also confirmed that state pension would rise by £2.95 a week from next April and that going forward pensioners would be able to buy voluntary national insurance contributions to top up their incomes.

Your Comments

Who the hell's going to vote for a Government that is going to make you work till you are 70? The idea behind this is work till you are 70 then you die. This way the Government will not have to pay you a pension...which is more money for them.
So you are going to vote for yourself to have to stay at work till you are 70?. Don't think so.
This man has lost the plot!! 

the other parties will do exactly the same, they have already stated this, it makes no difference it all has to change, it is simply unaffordable as it is now. irrespective of who is in power.

What about the unintended consequences of this?
The greatest expense to the state is not the young retired  - it is those in their 80's and 90's (and increasingly beyond) who need care.  By forcing people in their 60's to carry on working we are eliminating the very people who are likely to be able to provide this care for free and hence the state will end up paying out for expensive professional care instead.
Also when everyone has to work till their 70's who will provide the free childcare that enables many mothers to work, and who will man the charity shops and do the voluntary work that supports Mr Cameron's "big society?"
This is a plan thought out by wealthy 40 somethings who know that it will not affect them personally.

I think a lot of people have 'lost the plot'.  Governments can't keep you in the manner you've become used to - you have to rely on YOURSELF.
When the State pension was introduced in about 1909 the life expectancy of the average man was about 56 and the pension was means tested and only payable at age 70!  It was also worth 5 shillings a week (25p) or 7s 6d (37p) for a married couple.
The basic error made by the politicians when they invented the State Pension all those years ago was that they didn't pay up front for the those who were already retired and those that retired in the early years.  The reason was they couldn 't afford it  So they invented schemes which meant that those working now paid for those who were already retired.  Easy money to find!  If the scheme had been arranged properly so the workers' contributions that were paid in went into a fund which they then got out when they retired (like a current day private pension) we'd all be far better off.  Instead of that the State Pension continues to be a whipping boy for the so-called poor who've never saved for their retirement and a millstone round the neck of every Chancellor in 100 years.
As far as 'working to 70 and than dying' is concerned, if people made proper provision in the decades of work, they would not be in need of the state's support (or be expecting more than the pittance now paid).  It would also mean they could decide when they wanted to retire rather than waiting to be told by a politician.
And 'no' I'm not a Tory Toff, but an ordinary bloke who saw 40+ years ago that I would be mad to assume the government would give me anything much when I stopped working (hard).  So I saved and now at 68 years I've just decided to retire (except for a part time casual job to keep my marbles) and I've got enough for me to enjoy my life.  And to make sure my son understands that too, I encouraged and helped him to start saving for his pension at the age of 22.
The reality is that the State Pension is becoming unaffordable.  With more people retiring and living longer and with less contributors to the payment of the scheme (as a % of the population), the time is rapidly approaching when something will have to give.  That'll mean rising taxes (howls of rage!) and further extending of the retirement age (further howls of rage!).
Moral, never rely on a politician to do you any favours and if you do, don't complain when they fail you.