WATCH: Government under fire as it confirms rise in pensions age

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The Government has been accused of 'picking the pockets' of millions of people in their forties after announcing that anyone born between 1970 and 1978 will have to wait for an extra year before receiving their state pension.

The state pension age for men and women will rise from 67 to 68 between 2037 and 2039, seven years earlier than previously planned, in a move designed to save £74 billion by 2045/46, Work and Pensions Secretary David Gauke told the House of Commons.

Work and Pensions Secretary David Gauke announces in the House of Commons. Picture: PA

Work and Pensions Secretary David Gauke announces in the House of Commons. Picture: PA

Mr Gauke said that increases in life expectancy meant that those affected could still expect to receive more over their lifetimes than earlier generations.

But charity Age UK pointed out that his announcement comes just days after former government adviser Sir Michael Marmot warned that the trend towards longer lives was "pretty close to having ground to a halt" since 2010, after rising constantly since the Second World War.

Labour said the change - in line with the recommendations of this year's Cridland Report - would mean 34 million people working longer than they would under its plan to hold the retirement age at 66.

Under current plans, the state pension age for men and women will be equalised at 65 at the end of 2018, before rising to 66 in 2020 and 67 in 2028.

The new change affects anyone born between April 6 1970 and April 5 1978.

The Department for Work and Pensions (DWP) said it would save the equivalent of £400 a year per household.

Mr Gauke told the Commons: "Increases in life expectancy are to be celebrated, and I want to make clear that even (with) the timetable for the rise that I'm announcing today, future pensioners can still expect on average more than 22 years in receipt of the statepension.

"But increasing longevity also presents challenges to the Government.

"There is a balance to be struck between funding of the state pension in years to come whilst also ensuring fairness for future generations of taxpayers."

The DWP said that under the previous timetable, Government spending on the statepension would have risen from 5.2% of GDP now to 6.5% in 2039/40. The new timetable reduces that figure to 6.1%.

Latest projections show that the number of people over state pension age in the UK is expected to grow by a third from 12.4 million to 16.9 million between 2017 and 2042.

In 2015 average life expectancy in Britain was 79.6 years for men and 83.1 years for women, according to the Office for National Statistics.

Shadow work and pensions secretary Debbie Abrahams described Mr Gauke's announcement as "an astonishing continuation of austerity that means 34 million people will work longer than under Labour's plans".

Ms Abrahams said: "The latest research shows that working people in some places will now fall ill 10 years before receiving their state pension under the Tories' new plan - and just days ago, evidence emerged showing that increases in life expectancy are stalling.

"Indeed, most pensioners will now face what has been described as a 'toxic cocktail' of ill health throughout their whole retirement.

"We cannot allow this Government to push people to work longer and longer to pay for its failed austerity agenda."

But the DWP said that keeping the state pension age at 66 would cost more than £250 billion over the period to 2045/46, compared with the Government's plans.

Age UK charity director Caroline Abrahams said: "In bringing forward a rise in statepension age by seven years, the Government is picking the pockets of everyone in their late forties and younger, despite there being no objective case in Age UK's view to support it at this point in time.

"It is astonishing that this is being announced the day after new authoritative research suggested that the long-term improvement in life expectancy is stalling.

"For people in mid-life and younger their state pension may seem a lifetime away but the fact is that the change announced today will have a real impact on them later in life."

Mr Gauke said: "I want Britain to be the best country in the world in which to grow old, where everyone enjoys the dignity and security they deserve in retirement.

"Since 1948 the state pension has been an important part of society, providing financial security to all in later life.

"As life expectancy continues to rise and the number of people in receipt of statepension increases, we need to ensure that we have a fair and sustainable system that is reflective of modern life and protected for future generations."

The Scottish National Party's depute leader in Westminster Kirsty Blackman said the announcement had been held back until after the election as it would have cost the Conservatives votes.

And she said it would hit particularly hard in Scotland, which has lower life expectancy rates than the rest of the UK.

"It's clear why the UK Government held back until after the election and did not publish this on the legal date it was supposed to on May 7, as this would have undoubtedly lost the Tory Party even more seats than they did," said Ms Blackman.

"It is utterly shameful that the Tory Government could sneak an announcement that will hit people across the UK during the last week of Parliament before recess. It is yet another chapter in the Tory Government's hit on people already struggling due to this Government's austerity-driven agenda."

TUC general secretary Frances O'Grady said the Government risked creating "second-class citizens" by hiking the pension age.

"In large parts of the country, the state pension age will be higher than healthy life expectancy," she said.

"And low-paid workers at risk of insecurity in their working lives will now face greater insecurity in old age too.

"A decent retirement is a right for us all, not a privilege for the few.

"Rather than hiking the pension age, the Government must do more for older workers who want to keep working and paying taxes."

Gail Cartmail, assistant general secretary for Unite, said: "This is a kick in the teeth for millions of workers, who now face working up to a year longer before they receive their state pension.

"The Government is cynically making workers pay for their failed economic policy."

GMB national pensions organiser Keir Greenaway said: "The Tories' sneaky increase to state pension age, clobbering six million people, comes in the same week we are told that life expectancy rises are grinding to a halt.

"This is the double bite of austerity - workers are expected to work longer and could now be at risk of dying sooner."

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Downing Street rejected suggestions that the pensions announcement had been timed to coincide with the publication of BBC salary details in an attempt to "bury" the news.

The Prime Minister's official spokesman said: "We published the report before the election and we were committed to responding to that as soon as possible.

"Obviously the election then happened, so it was important for us to do it before we got to summer recess."

The spokesman added that the plan was to make the statement immediately after Prime Minister's Questions - "the point of the week when there is most attention on Westminster".

"I don't think it's legitimate to say we were seeking to bury it," he said.