Spending Review: state pension age to rise early

Guy Anker
Managing Editor
20 October 2010

The Government is accelerating the rise in the official pension age, the Chancellor has confirmed.

This means many of today's workers will starting getting the state pension later than hoped (see the State Pension Boosting guide).

The official retirement pension age for men and women will reach 66 by 2020, four years earlier than planned.

This will involve a gradual increase in the age from 65 to 66 for both genders, starting in 2018.

And it will mean an acceleration of the increase in the female pension age from 60, already underway since April.

From 2016 the rate of increase will be three months in every four rather than the current plan of one month in every two.

The previous Labour government's policy was to raise the state pension age to 66 in 2024 and then incrementally to 68 by 2046.

Chancellor George Osborne says: "Raising the state pension age is what many countries are now doing, and will by the end of the next Parliament save over 5 billion a year."

Auto-enrolled pensions to go ahead

Meanwhile, the Government has confirmed its plan to automatically place employees in a workplace pension, to include contributions by their employer, will go ahead.

It says the Department for Work and Pensions's budget will include funding for the introduction the scheme, called the National Employment Savings Trust (NEST), to start in 2012.

It is expected Nest will become the largest pension fund in the UK, with between three million and six million members.

Further reading/Key links

Pension help: State Pension Boosting
Best rates: Top Savings, Top Fixed Savings
Stay safe: Safe Savings

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