Pension age could rise to 68 to help plug deficit

THE pension age could rise to 68 years earlier than planned to plug the hole in Britain’s finances, it emerged yesterday.

The controversial move would disrupt retirement plans for millions if it goes ahead, but would raise billions for the Treasury.

At present, the state pension age is due to rise to 67 by 2028 and 68 by 2039. But under the plans – reported by the Telegraph – the latter increase could be brought forward to the mid-2030s.

This would leave those in their mid-50s now waiting an extra year before drawing their pension.

It was announced in this month’s Autumn Statement that the review of the state pension age will be published in ‘early 2023’.

Within Government, there is an ongoing debate about when the pension age should rise to 68.

Under the current law it will hit 68 by 2046, though existing policy is that it should happen by 2039.

But Ministers under Boris Johnson, Ms Truss and now Rishi Sunak

Treasury savings could be about £10 billion

have been inclined to pull the date forwards, sources told the paper.

Should it be brought forward to 68 by the mid-2030s, the Treasury savings could be about £10billion, according to pension experts.

The LCP consultancy estimated around £8billion would be saved in pension payments and £1.3billion in taxes on extra earnings, though that could be higher.

When she was Prime Minister, Liz Truss dubbed it a ‘silver bullet’ and initially wanted to announce it in her mini-Budget, it said.

George Osborne, the former Chancellor who oversaw a rise in pension ages, remarked on how relatively easy, politically, it is.

But it has proved a controversial topic, with a fierce backlash from the Waspi (Women Against State Pension Inequality) campaign against the decision to equalise the male and female pension age.

A spokesman for the Department for Work and Pensions said: ‘No decision has been taken on changes to the state pension age.’