Millions of people could have to wait longer to collect their state pension, Chancellor George Osborne announced in the Autumn Statement today.
At present, the state pension age is 60 or 61 for women and 65 for men, which will rise to 66 by 2020 and 67 by 2028 (see our State Pensions guide for more information).
But the Government is to propose new laws for a new state pension age framework. This would be reviewed every Parliament on the principle that people should expect to spend, on average, up to one third of their adult life in receipt of the state pension.
Under this theory, the Government says the state pension age is likely to go up to 68 in the mid-2030s, rather than the current date of 2046, and up to 69 by the late 2040s.
This will help save around £500 billion from the national bill for pensions over the next 50 years, Osborne said.
Osborne also confirmed the full basic state pension will rise by 2.7% – £2.95 a week – from £110.15 to £113.10 a week from April 2014.
Meanwhile the additional state pension, which is based on your earnings and whether you've claimed certain benefits, and isn't a fixed amount like the basic state pension, will also increase by 2.7% from April 2014.
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From October 2015, for a limited time only, current pensioners and those who reach pension age before the introduction of the new single tier pension on 6 April 2016 (see the Government outlines flatline state pension MSE News story) will be able to make extra national insurance contributions (NICs) to boost their additional state pension.
The Government says it will legislate to introduce the scheme and a new class of NICs "as soon as possible", and further details will be announced closer to when it comes into effect.