Monday 18 December 2017

UK set to raise state pension age to 68

Autumn statement on economic plans due today

Britain's Chancellor of the Exchequer George Osborne
Britain's Chancellor of the Exchequer George Osborne
Colm Kelpie

Colm Kelpie

Britain looks set to raise the state pension age to 68 in the mid-2030s, a decade earlier than previously expected, to offset the impact of improving life expectancy, the government said.

The change, announced ahead of the government's Autumn Statement on its economic plans later today, would affect Britons who are now below the age of 50.

The government has already announced that the state pension age will rise to 66 by 2020 and 67 by 2028 for both sexes, from 65 for men and 60 for women, and those dates will not change, it said.

Similar changes have already been introduced here.

From January 1 the state pension age will increase to 66. The age will increase to 67 from January 2021 and 68 from January 2028.

In the UK, bringing forward the increase in the retirement age to 68 would help make the pension system more affordable and make it fairer so people across generations spend, on average, up to one third of their adult lives in retirement, the government said.

"These changes will help ensure the country's pensions system is affordable well into the future and that we have a sustainable long-term fiscal position," it said in a statement.

The state pension age had previously been expected to rise to 68 only in 2046.

Under current estimates of life expectancy the pension age is now set to rise again to 69 by the late 2040s, the government said.

"The principle announced today will save around £400bn (€481bn) or total savings of over £500bn once we include the previously announced increases to the state pension age (to 66 and 67)," the government said.

British Chancellor George Osborne is expected to announce later today that he is sticking with his goal to rein in Britain's budget deficit altogether by 2020, despite a recovering economy which has boosted tax revenues.

Governments across Europe are seeking to stem the soaring cost of universal basic pension provisions - which in Britain is projected to top 8pc of economic output by 2060, from just under 7pc now.

In France, President Francois Hollande has announced reform of the country's indebted pension system but has stopped short of raising the statutory retirement age of 62 years, fearing widespread public opposition.

Germany is gradually raising its state pension age from 65 to 67, although in recent talks on forming a coalition government, Chancellor Angela Merkel's conservatives agreed to demands from the Social Democrats to allow people with 45 years of contributions to retire early at 63.

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