State pension age for men likely to rise eight years earlier than expected and government considers retirement for all at 68
The state pension age for men is to be raised to 66 as early as 2016, and the government is to consider bringing forward a rise to age 68 to "be fair to the next generation of taxpayers".
The move would represent a eight-year cut in the time frame for raising the state pension age: under Labour the intention was to raise it to age 66 by 2024, and to 68 by 2046.
Men aged 59 now will be the first affected. Women are already experiencing a gradual raising of their state pension age from 60 to 65 by 2020. Although the government has not yet clarified its plans for raising women's state pension age to 66, if it then increases by another year, women now aged 54 will be the first of their sex to draw their basic state pension at 66.
The government also announced plans to consult on axing the defaultretirement age of 65 – the minimum age at which employers can force staff to take retirement – and on the automatic enrolment of employees into workplace pension schemes.
It re-iterrated its intention to restore the link between rises in the state pension and earnings from 2011, as announced in the budget on Tuesday. However, the link will be to the consumer price index rather than the retail price index, currently the lower of the two measures of inflation. The Conservatives broke the link between the state pension and RPI back in 1980 under the then prime minister Margaret Thatcher.
In a speech this morning, work and pensions secretary Ian Duncan Smith and pensions minister Steve Webb said: "Britain used to have a pensions system to be proud of, but due to years of neglect and inaction we are left with fewer people saving into a pension every year and the value of the state pension has been eroded, leaving millions in poverty. We must live up to our responsibility to reinvigorate the pension landscape.
