Industry supports 10 year notice period for state pension changes
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The Government looks set to give people 10 years notice of changes to their state pension age as part of proposals to introduce a more automatic mechanism to determine future SPA increases.
The DWP’s green paper on state pension reform, published on April 4, put forward two options for linking the state pension age to longevity.
The first would see the introduction of an automatic formula, while the second would involve regular reviews of UK longevity by an independent body.
Industry responses to the paper, published yesterday, suggest the majority support a mechanism based on independent reviews, with people given 10 years notice before any change in the SPA is implemented.
The DWP says: “The majority of respondents argued that incorporating some form of periodic review would be valuable because as part of the analysis of life expectancy data, it would allow for expert input on life expectancy trends and other factors such as healthy life expectancy and labour market conditions.
“Views about an adequate notice period for a change in state pension age varied, with the majority of individuals and organisations saying 10 years notice was appropriate.”
In an interview with Money Marketing in April, pensions minister Steve Webb (pictured) said there needs to be a “cultural shift” in retirement expectations in response to increases in life expectancy.
He said: “We need to culturally shift to a view where frankly people recognise we cannot have a definite answer on the question of when they will retire because we do not know what’s going to happen to life expectancy. You will know what ballpark you are in but you won’t know exactly.”
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