Economy

United Kingdom raises pension age from 67 to 68 starting in 2037

United Kingdom raises pension age from 67 to 68 starting in 2037

Statistics show improvements in life expectancy may be levelling off, meaning this increase may be less justified on affordability grounds.

The state pension age will rise to 68 between 2037 and 2039 - seven years earlier than planned, under government proposals announced today.

Work and pensions secretary David Gauke has denied he announced an increase in the state pension age on the same day as the BBC released details of how much it pays its star presenters in an attempt to "bury bad news".

'This is about the government taking responsible action in response to growing demographic and fiscal pressure, ' he said.

Here in Ireland, the age at which people can access the state pension is 66, but will be increased to 67 by 2021, and to 68 by 2028.

As a result this change will hit everyone born between 6 April 1970 and 5 April 1978.

Gauke said that the change is equivalent to a saving of around £400 per household based on the number of households today. The government's proposed timetable aims to bring this back to 6.1 percent of GDP.

In Canada, old-age pensions start paying out when you turn 65.

The state pension age is now set to increase to 68 between 2044 and 2046, but under new proposals this would be brought forward seven years.

A separate report from the Government Actuary's Department in March 2017 considered two alternative scenarios for the state pension age, under the government's principle that an individual should spend on average up to one third of their adult life above state pension age.

"This is an astonishing continuation of austerity that means 34 million people will work longer than under Labour's plans", Labour's work and pensions spokeswoman, Debbie Abrahams, said in a statement.

The government says the new timetable will "maintain fairness between generations in line with continuing increases in life expectancy".

A number of MPs also expressed disappointment that Gauke had chosen to raise the pensions age rather than take the opportunity to reverse the government's policy for so-called Waspi women - those born in the 1950s who have seen their pension age rise faster than expected.

'We can not allow this Government to push people to work longer and longer to pay for its failed austerity agenda.

"Since 1948 the State Pension has been an important part of society, providing financial security to all in later life".

Meanwhile, AJ Bell senior analyst Tom Selby said the government could face a "serious battle" to get the "unpopular" proposal through the House of Commons. "Without this decision people of working age would have faced a heavy tax burden". The government has said it will monitor the results of these efforts to encourage employers to better accommodate older workers, including allowing them to move from more to less physical work.