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Major Govt review recommends speeding up state pension age increases

Pensions-savings-retirement-piggy bank

The state pension age will need to increase again just ten years after the Government completes its last scheduled rise, according to a key report which also recommends abandoning the state pension triple lock.

The hotly-awaited Government-commissioned review by former Confederation of British Industry director general John Cridland into the state pension age has been released today and recommends that it needs to increase from 67 to 68 between 2037 and 2039.

The Government has already committed to raising the state pension age from 65 to 66 by October 2020, and then to 67 by 2028, but Cridland has recommended the rise to 68 comes at least 7 years ahead of the planned 2046 date.

To smooth the transition for those affected, Cridland has recommended offering means-tested support for the year before state pension age to those who can’t work due to ill health or caring responsibilities.

For those over state pension age, Cridland also suggests they could go into partial drawdown as they carry on working, while those who defer their pension should be entitled to a lump sum.

While increasing state pension age on Cridland’s timetable would cut state pension spending as a proportion of GDP by 0.3 per cent compared to Office for Budget Responsibility projections, removing the triple would further reduce state pension spending from 6.7 per cent of GDP to 5.9 per cent by 2066/67, Cridland argues.

The Cridland report reads: “In the longer term the retention of the triple lock is forecast to become a very significant factor in the cost of the State Pension. It is estimated that it would be responsible for 0.9 per cent of GDP in 2066/67. This will raise questions of intergenerational fairness as between those in work and those in retirement.

“The longevity link appears close to the limit of what can be saved on state pension spending through increases in the state pension age. Further savings to ensure fiscal sustainability are more appropriately delivered by moving in the future to uprating the pension by earnings.

“We therefore recommend that the triple lock is withdrawn in the next Parliament.”

A separate report commissioned from the Government Actuary’s Department also released today shows the impact of sticking to a principle announced by the Coalition Government in 2013 that an individual should spend on average up to one third of their adult life above state pension age.

If individuals are to spend exactly a third of adult life above state pension age, the GAD predicts that the state pension age would rise again to 69 between 2053 and 2055. However, if this drops to 32 per cent, the state pension age could hit 69 as soon as 2040.

The Government says it will place equal weight on the Cridland and GAD reports before making its decisions in May.

Hargreaves Lansdown head of retirement policy Tom McPhail adds that the report, which highlights the importance of the Government’s role in making everyone affected aware of the changes to state pension age, “could be construed as a dig a recent Department for Work and Pensions communications”.

The Women Against State Pension Inequality Campaign have criticised DWP for failing to inform women born in the 50s that their state pension age would increase.


John Cridland BBA Conference 2012 480

Former CBI chief Cridland to lead state pension age review

The Government has appointed John Cridland CBE to lead an independent review of the state pension age. The 2014 Pensions Act introduced a requirement for the state pension age to be reviewed in each Parliament, taking into account changes in life expectancy and the sustainability of the system. Cridland, a former director general of the […]


State pension age should not increase further, PLSA says

The Pensions and Lifetime Savings Association says it does not want to see the state pension age increased any more because it would disadvantage groups of people with lower than average life expectancies. In its response to the Independent Review of the State Pension Age, being led by former CBI director general John Cridland, the […]


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There are 13 comments at the moment, we would love to hear your opinion too.

  1. Trevor Harrington 23rd March 2017 at 9:51 am

    Governments will fall on this matter, unless they start to deal with the real issues of pension inequality between the Public and the Private Sector, and start to make plans to bring the state retirement age back down to age 60.

  2. The issue is not just the OAP, its is the Final Salary Pensions for Public Sector employees that is causing the biggest future liabilities and problems. Remove the liability being built up for these Defined Benefit arrangements and there may be sufficient funds to at least leave state retirement ages where they are.
    As always this would be political suicide as the Public Sector would put any party out of office for even suggesting the end of their DB arrangements, they demand “FAIR PENSIONS OF ALL”, believing their pensions are very poor value.
    So as a NATION we gain speed towards the inevitable crash that will see all get nothing as politicians need votes, so will over promise and eventually fail.

  3. The majority of people who will rely on the OAP will be poorer, manual workers, not the head of the CBI. To expect a labourer to work until 70 is frankly ludicrous. What is needed is for society as a whole to benefits from technology and not for the profits of the same to be salted away into tax havens by the likes of Amazon and Google.

  4. Christine Brightwell 23rd March 2017 at 11:47 am

    Why so much bitterness aimed at the public sector employees? Most of these pensions are tiny amounts paid to people who have been paid low salaries. It is sad that so many cannot see past the minority high paid civil servants to those at the grass roots who are stressed, overworked and have to live with a culture of bullying. The pensions are part of their pay which is delayed until later – it does not become payable all at once, so the figures bandied about as to the magnitude of the liability overall are meaningless.

    • Trevor Harrington 23rd March 2017 at 1:24 pm

      Quite so Christine – the problem is not the ordinary workers within the Public Sector, as you rightly say, most of whom have a relatively small pensions to look forward to because their life’s work in the sector has been at relatively low pay scales.

      However, the higher paid workers (managerial levels) in the public sector is often where the fraudulent early retirements on enhanced pensions for service years, which have not been worked, has often been awarded.

      Then there are also the utterly unjustifiable enhanced benefit early retirements through spurious and fraudulent ill health claims, where ill health is so obviously absent just a few days after the award is made.

      These areas of chronic pension abuse in the Public Sector now account for many billions of £s each and every year, and they do now form a major part of our annual budget deficit, and therefore the burgeoning national debt.

      So, as you rightly say, not the lowly public sector worker, but definitely higher management awarding pension benefits to themselves and their colleagues, which is massively expensive, completely unaffordable, and quite frankly utterly illegal.

      However, I would also point out that the terms and conditions of employment, pay rates, hours worked, and subsidiary benefits, such as the Public Sector Pension, is also massively in excess of that which people could possibly hope to be paid in the Private Sector …. and has been so for many years.

      These inequalities must eventually be addressed, and it is not productive to continue portraying the hugely outdated view that the Public Sector is hard done by … as it is patently untrue.

  5. “Intergenerational Fairness” What about the intra year unfairness to women born in ’53 who reach SPA in 5 different years (2015 – 2019)? What about the inter year unfairness to those born 53/54 with a 3 year 4 month difference in SPA (DOB 5 Jan ’53 SPA 62 years 8 months, DOB 6 Sept ’54 SPA 66 years)? What about the unfairness to those who have paid SERPS/SP2 but been unable to contribute to a private or public sector pension?

  6. Exactly Trevor. Why do the Government consider all the mega billions of enhanced pensions paid to public sector employees affordable but refuse to find any way to sort out the mess they have made with the State Pension Fiasco?

  7. A third of our working life spent in retirement? I was born in 1969 – expecting to retire in 2029 (age 60) and now have a state retirement age of 67 in 2036 – I started work at age 16 so that will be 51 years of working by age 67 (instead of the expect 44 years) … 17 years of state pension will take me to 84… I’d be very lucky to live to that age – in fact if I pop my clogs around 80 the government would still be quids in with me had I retired at the original age of 60.. average life expectancy is 82 for females… So the gov. are working the numbers to be in credit from making people work longer.

  8. Just going to throw the hand grenade in here Christine but I’m a little bit miffed that, ignoring unequal pay (which is in theory illegal, but still happens sadly) given that average life expectancy for men is 2 – 3 years lower than women, why they shouldn’t wait a couple of years longer, given the same NI contributions?

    Just saying?

  9. The inter-generational fairness is THE major problem for the UK. There is a LOT of resentment building up within the younger generations….to the point when the skilled, highly-qualified ones (ie the ones we REALLY need) will say “S*d this! Why am I subsidizing all these geriatrics who blew all their spare cash on booze and fags and so now have little personal pension provision….and are also now clogging-up all the hospitals that MY taxes pay for”. That generation are likely to up-sticks giving a big 2-finger salute to the UK. If that includes my kids then I’d encourage them to go….and then I’ll join them.

  10. Trevor Harrington 24th March 2017 at 9:59 am

    Reading through the above, whilst being cautious with some of the more obvious diatribe, I think we are illustrating a number of things here :

    A) The public at large are much more knowledgeable about the inequalities in our society today, than the Government recognises.
    B) People are now much less likely to ignore the reduction in their long term state benefits when certain members of the community are taking extreme advantage.
    C) Quite obviously the state retirement age is much too high at 68, and probably needs to come down to age 60 for all.
    D) The obvious disparity in working conditions between the Public and Private sectors needs to be dealt with.

    I think the problem goes right to the roots of our democratic system, which promotes Party politics rather than individual accountability and creativity, and the voting population is mostly incapable of voting beyond that which benefits themselves directly, rather than that which benefits the entire community.

    In more recent politics, the result has been that the public is beginning to signal its dissatisfaction with the “establishment” who seem incapable of doing the right thing for all of the people, in preference to feathering their own nests, and also they are signalling their utter contempt for the lies, deceit, and political correctness of the “so called” free press.

    As a result, in the UK we have rejected the controlling and stifling protectionism of a federal Europe, and the Americans have voted for a President who does at least call a spade a f—— shovel, however unpleasant that may be to behold.

    This voter rejection of the establishment and journalistic deceit needs to be recognised by all governments rather quickly (in historical terms) before it degenerates into extremism and a developed world despot.

    The voting in Europe is much closer to catastrophe than we are, with various extremist politicians rising to the fore, where until recently they were nicely cocooned in genteel amusement and oblivion.

    There is more than enough money (tax revenues) coming in to our Government to afford everything which we need and aspire to. It is just that it is being spent in the wrong places. An obvious example – allowing early retirements through fictitious ill health at the top of the salary scales in the Public sector, whilst denying a state pension to a labourer who cannot work beyond age 60 because his body is knackered.

    Whilst change needs to be slow and not precipitous, it would be a good idea if the Government could illustrate their acknowledgement of these huge social inequalities, and at least provide a schedule of how long it is going to take to get us back to sensible retirement ages (age 60 for all), and eliminate the disparity in working conditions and employment benefits between the public and private sectors.

    Unfortunately, the time scale involved will be decades rather than years.

  11. Why do we continue to pay national insurance after 35 years. It should stop . You have pay into system for your state pension.

  12. […] CBI director John Cridland’s report was released in March, and said bringing forward the state pension age increases would cut state pension spending as a […]

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