Budget 12: State pension to be linked to life expectancy
Chancellor George Osborne has confirmed future increases in the state pension age will be linked to life expectancy.
Speaking to Parliament today as part of the Budget, Osborne (pictured) said details of how the “automatic review” system will work will be published in the summer.
He said: “I’ve also said that we would consider proposals to manage future increases in the state pension age, beyond the increases already announced.
“I can confirm today that there will be an automatic review of the state pension age to ensure it keeps pace with increases in longevity.
“Details of how this will operate will be published alongside the OBR’s long term fiscal sustainability report this summer.”
Osborne also told MPs that if Government departments continued spending at current rates the welfare bill will have to be cut by £10bn by 2016.
Plans to introduce a link between the state pension age and longevity were first outlined in a Department for Work and Pensions green paper published in April 2011. The move could mean younger people will not receive a state pension until their mid-70s.
The green paper also set out proposals to introduce a flat rate state pension worth £140 a week.
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