Page:[/index.php] Hiking state pension age will bring 'misery' to Brits approaching retirement – Investing Lab

Hiking state pension age will bring 'misery' to Brits approaching retirement

Ministers have been warned hiking the state pension age earlier than planned could have “devastating consequences” for people in their 50s.

Age UK has claimed the move would set up hundreds of thousands already struggling for a “miserable and impoverished few years in their run up to retirement”.

It comes amid reports the Government is considering raising the retirement age to 68 as early as 2035.

The change, which could be announced when Chancellor Jeremy Hunt delivers the Budget in March, would affect those born in the 1970s and later.

The current retirement age is 66 and will increase to 67 in 2028, but as it stands, a scheduled rise to 68 is not due until 2046.

The Department for Work and Pensions insisted that “no decision” had been made by ministers on changes to the state pension age.

In a new analysis, Age UK says that 3.5million aged 50-64 are currently classified as ‘economically inactive’ with 31% having savings of less than £5,000.

Chancellor Jeremy Hunt could announce the changes at the Budget in March
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PA)

The organisation adds there is “no justification” for increasing the state pension age, with 1.3 million sick and a half a million with caring responsibilities.

Charity Director Caroline Abrahams said: “Nothing could better demonstrate the level of inequality in our society and the importance of doing more to give those on the lowest incomes in this age group some hope.

“If Ministers decide to tinker with the SPA [state pension age] again as part of their review, and do so in favour of the state, this will definitely be a move in the wrong direction and a denial of social justice.”

She added: “Certainly, as things stand, and against the context of endemic ageism in the labour market, any decision by the Government to make today’s fifty-somethings wait longer for their state pension would be setting up hundreds of thousands of men and women for a miserable and impoverished few years in their run up to retirement – a kick in the teeth they could well do without.”

The Liberal Democrat’s DWP spokesperson Wendy Chamberlain said the Government “seems to have completely lost the plot”.

She added: “They’ve messed up people’s lives by hiking taxes and causing mortgages to spiral and now they want to force millions to change up their retirement plans.

“With like expectancy falling there is a real risk that people will die before they reach retirement. It just shows this government is completely out of touch.”

Tom Selby, the head of retirement policy at the investment service AJ Bell, said: ” Rishi Sunak will be playing with political fire if he decides to accelerate the planned increase in the state pension to 68.

“The latest official data suggests average life expectancy improvements – the main justification for state pension age increases – have gone into reverse since the pandemic.”

A spokesperson for the Department for Work and Pensions added: The Government is required by law to regularly review the state pension age and the second state pension age review is currently considering, based on a wide range of evidence including latest life expectancy data and two independent reports, whether the rules around state pension age remain appropriate.

“The review will be published early this year.”

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