State pension review sparks fears over retirement age

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State pension review sparks fears over retirement age

CBI LogoA review of the state pension age could mean people joining the workforce today will have to wait until their mid-70s before they retire, experts have warned.

Former CBI boss John Cridland has been appointed to lead the review, the first of regular five-year assessments.

Those under the age of about 55 will be affected by the shake-up, which will consider what the state retirement age should be from April 2028.

The results will be published next May.

The government said the review, required under existing legislation, would consider changes in life expectancy as well as wider changes in society and “make sure that the state pension is sustainable and affordable for future generations.”

It said it would also consider whether “the current system of a universal state pension age” rising in line with life expectancy was “optimal in the long run”.

This suggests the review will look at whether the retirement age should rise even if life expectancy slows.

‘Faster than planned’

Currently, the state pension age is set to be 67 for both men and women by 2028.

Baroness Ros Altmann“It’s not just about raising it [state pension age], it’s about considering the best way to manage the state pension age policy,” Pensions minister, Baroness Roz Altmann, told the BBC.

Hargreaves LansdownBut Tom McPhail, head of retirement policy at financial services firm Hargreaves Lansdown, said the review meant state retirement age would increase faster than currently expected.

“We fully expect state pension ages to go up faster than currently planned, and those joining the workforce today are likely to find themselves waiting until their mid-70s to get a payout from the state system,” he said.

Shadow work and pensions secretary Owen Smith also warned that “the terms of this review may suggest that the Tory Government is set to speed up rises in the state pension age, throwing into chaos the retirement plans of millions of British workers.”

Read the original story on the BBC website.

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