Pension age rise 'a bitter blow'

In his autumn statement, Chancellor George Osborne outlined plans to raise the state pension age to 67 between April 2026 and April 2028 in response to people living longer.

The measure is expected to save around £60 billion in today's prices between 2026-27 and 2035-36 and will prolong the working lives of millions of people.

Minister for pensions Steve Webb recently said timescales set by the previous Labour administration, under which the pension age was to rise to 67 in 2036, were "too slow" and argued more drastic action was needed to avoid a major pensions crisis as life expectancy rises.

Michelle Mitchell, charity director for Age UK, says: "The decision will come as a bitter blow to many people fast approaching retirement, especially those in ill-health, caring for relatives and those out of work.

"Age UK recognises that as life expectancy increases it is reasonable to consider increases to state pension age and longer working lives, however this decision has been based on no published detailed analysis.

"Average life expectancy must not be the only factor considered as the huge disparities in healthy life expectancy across the country means the poorest socio-economic groups will be required to sacrifice proportionately more of their retirement."

Current pension age

Before that, the state pension age for women will reach 65 (from 60 in April 2010) by November 2018 and rise to 66 for men and women by April 2020. It is currently 65 for men.

Saga director general Dr Ros Altmann says the announcement that the state pension age will increase to 67 starting from 2026 is broadly in line with other nations.

She says: "Around that time, the US, Netherlands, Germany, Denmark and Spain will all be increasing pension ages to 67 and Ireland's pension age will be 68.

"It does give people around 15 years' notice, which is fair."

Meanwhile, the basic state pension payout will rise by £5.30 a week to £107.45 next year.