State pension age hike must come sooner, says review

A woman operates machinery to illustrate state pension age

Financial planning in association with Scottish Widows bannerState pension age increases need to be brought forward, according to a government-commissioned review

According to the review – by former CBI director general John Cridland – people now under the age of 45 may have to start working a year longer, up to 68, between 2037 and 2039, at least seven years ahead of the planned 2046 date.

Cridland also suggested that further increases might take place by a year per decade, in line with changing longevity expectations, which could mean the state pension age could rise to 70 by as early as 2057.

Measures put forward in the review to mitigate any harmful effects of the proposed changes included a proposed “mid-life MOT” which addresses people’s “lifestyle, their skills, paid and unpaid work and their retirement income.”

Cridland also recommends the provision of means-tested support to those with ill health or caring responsibilities during the year leading up to state pension age, and that those over state pension age could have the option to go into partial drawdown while still working.

Those who defer their pension, he suggests, should be entitled to a lump sum.

“My review considers the consequences of an ageing society,” Cridland said. “It addresses how we can afford to live a longer pensionable life, how we can work longer, where this is necessary and possible and where it is not [and] how to give assistance to those who need it.

“The aim is to smooth the transition for tomorrow’s pensioners, and to try and make the future both fair and sustainable.”

The report comes at a time when separate analysis for the Department for Work and Pensions (DWP) has suggested that workers currently under the age of 30 may not get a pension until the age of 70, and a few weeks after Cridland’s warning that the “Brexit Factor” had made the future of the state pension uncertain.

The government is due to make a decision on both reports by May.

State pension age – read more

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