The tax implications of reversing the state pension age increase for women would result in an unprecedented stretch on the national economy, according to AJ Bell.
The statement follows government analysis figures that show reversing the state pension age increase for women would cost the Treasury £181bn by 2025/26.
The analysis has been published ahead of the High Court judicial review into whether women born in the 1950s have been discriminated against.
AJ Bell senior analyst Tom Selby says an £181bn hole in the UK’s finances would be colossal.
He says: “These eye-watering costs explain why the government has been so steadfast in refusing to rethink controversial increases to the state pension age for women.
“While those affected are understandably aggrieved at the impact the hike has had on their retirement plans and the lack of notice given, paying out £181bn to those affected would leave a gaping black hole in the nation’s finances.”
A shock state pension bill would also be difficult for the government to swallow, Selby adds.
“With a no deal Brexit now firmly on the table with Conservative leadership candidates, a shock state pension bill is absolutely the last thing the government needs.”
If the pensions age were to be lowered again, the hole left by the £181bn would likely fall on the shoulders of Generation Y, he adds.
“That black hole would need to be filled one way or another. In all likelihood, it would precipitate a stiff increase in taxes and therefore an immediate transfer of wealth from millennials to baby boomers.”