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Increasing state pension age to save £2bn a year

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The Pensions Policy Institute says that the Government’s proposals to increase the state pensions age could save £2bn a year.

A PPI review of the coalition Government’s pensions policies suggests that raising the male pension age to 66 from 2016 would save £2bn a year from 2017 and if the female state pension age was inc-reased to 66 from 2020, the annual saving would be £3.5bn by 2020.

The PPI says policies, such as scrapping forced annuitisation and potentially allowing early access to pension savings, would lead to greater flexibility for some savers.

However, it says it is too early to say what the likely effect of the Government’s other pension policies will be.

The PPI says: “The coalition Government’s impact on pension policy will be clearer once the results of the review on state pension age changes and the commissions on public sector pensions and long-term care are announced and once any announcements are made regarding Nest, auto-enrolment and tax relief on pension contributions.”

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