Six million more must carry on working to 68
Pension move hits those in their forties
SIX MILLION people in their forties will have to work an extra year to get their state pension under cost-cutting reforms published yesterday. The rise in the pension age to 68 is being brought forward by seven years, affecting millions born between 1970 and 1978.
Work and Pensions Secretary David Gauke said the move, which will save £74billion, was fair given rises in life expectancy. But critics accused ministers of ‘picking the pockets’ of millions and questioned whether the decision was fair to manual labourers, whose life expectancy is lower.
The charity Age UK pointed out that it comes days after former government adviser Sir Michael Marmot warned the trend towards longer lives was ‘pretty close to having ground to a halt’.
Downing Street was forced to deny trying to ‘bury’ the controversial announcement by making it on the same day as explosive revelations about the pay of BBC stars, saying it was a coincidence.
Expecting a Commons battle, ministers have delayed legislating on the change until 2023, after the next election.
The latest projections show the number of people over state pension age in the UK is expected to grow by a third from 12.4million to 16.9million between 2017 and 2042.
Under current plans, the cost of the state pension is due to rise from 5.2 per cent of GDP to 6.2 per cent by the mid-2030s – equal to a tax rise of £725 per household per year.
Bringing forward the pension age increase by seven years will roughly halve the rise, saving households about £400 each. In total, the savings will be worth £74billion to the public purse by the mid-2040s.
The pension age will rise from 67 to 68 between 2037 and 2039, not 2044 as expected. It affects anyone born between April 6 1970 and April 5 1978 – a group aged 39 to 47.
Mr Gauke, 45, who will be affected by the change, said: ‘Failing to act now in the light of compelling evidence of demographic pressures would be irresponsible and place an extremely unfair burden on younger generations.’
Officials acknowledged the pension bill will continue to soar even after the change is pushed through. Government actuaries forecast that the pension age will need to rise to 70 by the mid-2050s to keep costs under control.
But Labour, which has pledged to freeze the state pension age at 66, condemned the plans. Shadow work and pensions secretary Debbie Abrahams said rises in the pension age meant most pensioners would face a ‘toxic cocktail of ill health throughout their retirement’.
Caroline Abrahams, director of Age UK, said: ‘The Government is picking the pockets of everyone in their late forties and younger, despite there being no objective case in our view to support it.’
Former Treasury mandarin Lord Macpherson also criticised the move, suggesting it would be fairer to scrap the triple lock on pensions and ask the self-employed to pay more National Insurance.
He said raising the pension age ‘discriminates against the poor and manual workers’ who have lower average life expectancy.
Failing to act now would place an unfair burden on younger generations Pensions Secretary
Picking the pockets of everyone in their late forties and younger Caroline Abrahams
AFTER a lifetime paying National Insurance, workers surely have the right to expect retirement at an age when they can fully enjoy it. But yet again, the state pension age has been put back, with six million more told to work to 68. When will ministers get the message that they waste far too much of our money, leaving too little for the necessities of a decent life?
YESTERDAY, it was reported that cod is once more on the menu, North Sea stocks having bounced back from a perilous low. On page 25 today, John MacLeod eloquently pays tribute to this magnificent species and its contribution to life in these isles over the centuries.
And credit is due to the fishing industry, which has laboured hard to protect and replenish precious stocks. In the end the environment wins, the industry wins and those very many of us who enjoy an occasional fish supper win too.