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.