David Gauke, the Work and Pensions Secretary, has announced plans to increase the retirement age from 67 to 68 in 2037, 7 years earlier than 2044 as original planned.
The change will be brought in over two years and will affect over six million workers born between April 1970 and April 1978, who under current legislation would be due to retire at 67, but will now have to work one year longer. If you were born before 5 April 1970, or after 6 April 1978, your current state pension age will not change.
The new timetable, which it is claimed will save £74bn by 2046/47, is intended to “maintain fairness between generations in line with continuing increases in life expectancy”, the Department for Work and Pensions (DWP) said.
Announcing the proposed change, Mr Gauke, said in the House of Commons:
“As life expectancy continues to rise and the number of people in receipt of State Pension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations.
“Combined with our pension reforms that are helping more people than ever save into a private pension and reducing pensioner poverty to a near record low, these changes will give people the certainty they need to plan ahead for retirement.”
Labour has promised to maintain the state retirement age at 66, but have left the window open to change their minds in the future.The current state pension age is 63 for women and 65 for men, with the former due to rise steadily until all workers retire at 65 by 2018.
From 2019, the state pension age will increase for both men and women, reaching 66 by 2020 and 67 between 2026 and 2028.
For further information about retirement age and entitlements see our main feature Retirement Income and Pensions.