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Budget 2011: Govt to link state pension age to longevity

George Osborne says the Government will seek a “more automatic mechanism” for increasing state pension ages by linking it to changes in longevity.

The Budget document says policymakers are considering undertaking a “regular independent review” of longevity changes to ensure costs are spread “fairly” between generations. The Government has already decided to bring forward the increase in the state pension age to 66 to April 2020.

The document says: “Given the continuing increases in life expectancy the Government will bring forward proposals to manage future changes in the state pension age more automatically, including the option of a regular independent review of longevity changes.

“This should ensure the costs arising from increased longevity are spread more fairly between generations, with cost savings and improved economic growth helping to ensure sustainable public finances in the future.”

Delivering the Budget today, the Chancellor also confirmed the Government’s commitment to reform the basic state pension, with a flat-rate, universal state pension of around £140 per week for future retirees one of a number of options being considered.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. What a great idea to merge income tax and NI. Unless you are at or above State Pension age, when you no longer make NI “contributions”! So will all pensioners now pay 31% on their income, rather than 20% as now? Maybe not such a great idea, after all. Or will there be a massive increase in Age Allowance to compensate?

  2. The true face of the return of the me me me generation. Tax the middle and lower classes, tax the poorest and most vunerable in one hand and give them a meaningless incentive in the other, keep big business happy for the old boy network and keep the token 50k higher tax but revue in a year it to see if the rich voters will continue to be lured. the man is a buffoon

  3. The government has confirmed that pensioners will NOT be required to pay NI, so that’s at least one piece of good news.

    Seems like a pretty fair budget to me, given the current econonic climate.

  4. Amateur Analyst 23rd March 2011 at 4:24 pm

    Moral Hazard alert.

    Link state pension age to longevity? Will that lead to a rise in the young folk bursting inflated crisp packets or baloons behind today’s pensioners so that they might see the State Pension Age reduce in the future?

  5. I think they’ll be wasting their time to link it to longevity – after all if the ECJ has ruled you can’t discriminate based on sex, surely the next step will be a ruling that you can’t discriminate based on age?

  6. Two issues. First, stop execs from receiving huge raises and bonuses in their final year, enabling them to loot pension funds for pensions that they havent earnt. Use whole life earnings before we bankrupt the pension plans. Next, Civil servants should not be able to hide their pensions in the general state pension funding. In the future, the fund will go broke, but somehow, they will continue to collect theirs. They should have their own pension funds, not use the taxpayer funds as a screen.

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