Shadow Chancellor George Osborne set out proposals to raise state pension age for men from 65 to 66 from 2016 instead of 2026, at the Conservative conference in Manchester on Tuesday. There will be a review on the age for women, who are already scheduled to see SPA rise from 60 to 63 by 2016. The plan is expec- ted to save £13bn annually.
Osborne said: “This is one of those trade-offs any honest Government has to confront. We will ensure that no increase will happen until the second half of the next decade.”
The ABI welcomed the “bold move”. Director of life and savings Maggie Craig says: “It is a good first step in contrast to the Government, whose decision to delay full implementation of their own pension reforms risks damaging the whole spectrum of pension provision.”
Standard Life head of pension policy John Lawson says a 45-year-old man saving £200 a month could see his pension rise by almost 10 per cent by delaying his retirement age by one year. He says: “Raising the bar to 66 will make the state pension more affordable for our children but delaying retirement by a year is also sensible for private pension savers.”
Hargreaves Lansdown head of pensions research Tom McPhail says: “The Tories have judged this well. There is now pretty widespread recognition that we need to move on retirement age.”
But pension consultant Ros Altmann says savings could be made faster through other means such as ending contracting out, which she says would save £6bn.
She says: “Changing the age allowance and tax relief would allow for better state pensions from, say, age 75.”