State pension age will rise to 68 in the mid-2030s rather than in 2046 as previously planned, Chancellor George Osborne is expected to announce in today’s autumn statement, which will commence at 11.15am.
Osborne is believed to be planning to increase SPA to rise to 70 for people in their twenties, with a rise to 69 in the late 2040s.
JLT Employee Benefits chief executive Mark Wood says: “Life expectancy is currently increasing by roughly two years every decade or about five and a quarter hours a day! The Government has chosen a moderate course. A much greater change could have been justified. Today’s seventy year olds can, on average, look forward to twenty years of retirement. Omitting those over the age of 50 from the changes means that those affected have sufficient time to plan ahead.
“Western countries are benefiting hugely from advancements in pharmaceuticals, public smoking bans, better diets and healthier lifestyles – and those railing against the changes being announced today must remember that this is unequivocally positive. It stands to reason that our pension provision and the length of our working lives must adapt accordingly with medical and health developments.”
Hargreaves Lansdown head of pensions policy Tom McPhail says: “This was always going to happen, it was just a question of how and when it was unveiled. There are provisions in the pensions bill for the SPA to be linked to life expectancy. 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.
“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.”