Government to 'review' state pension age
Newly appointed pensions minister Ros Altmann will launch an independent review of the state pension age by 2017.
In her first appearance in the House of Lords on Thursday, Altmann outlined her plan to review the state pension age in the coming months.
"Rising longevity means that successive generations are spending longer and longer in retirement. This is of course pretty good news; however, we all know there are huge cost implications for state pensions, which is why we will have an independent review of the state pension age by 2017.
"I want the review to consider not only rising life expectancy but also wider social occupational and indeed gender factors," she adds. "I am acutely aware of the disadvantages faced by women in our pension system."
New approach needed
However, she reiterated a promise by prime minister David Cameron that the 'triple lock' - rules requiring the state pension to increase by inflation, average earnings or 2.5 per cent, whichever is higher - will remain intact for the duration of this Parliament.
Altmann went on to accuse pension providers of not doing enough to make the new freedoms available.
"Too many firms are not offering the new freedoms to their customers, or imposing hefty charges, lengthy delays or exit penalties on those wishing to transfer."
Altmann's speech comes on the back of a statement on Wednesday (17 June) by chancellor George Osborne that the government could introduce a cap on the exit fees charged by pension providers to customers looking to switch to a different company.
"We must not allow consumer rights to play second fiddle to the interests of large financial firms. So far it is clear that competition has not always addressed consumer detriment, but ultimately it is in the interests of providers to look after their customers well. Their long-term success requires a new approach."
She concluded by saying she hopes also to examine transparency of pricing and ensure firms treat customers fairly.
This article was written for our sister website Money Observer
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).