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November 3, 2010    

Government confirms state pension age rise

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by Kay Murchie
Government confirms state pension age rise

The Government has today confirmed that the UK state pension age (SPA) will increase to 66 from 65 by 2020.

The measures were first announced in the Government’s Spending Review last month and followed a proposal already outlined by the former Labour Government.

The former Government had proposed to lift the SPA to 66 by 2026, but under the new Coalition Government, this has been brought forward by six years.

Women will initially see the change to 65 by 2018 to put them on a level with men. This will then be increased for both men and women to the age of 66 in increments during 2019 and 2020.

According to the Government, the move will affect almost 5 million people in the UK.

Commenting on the move, pensions minister Steve Webb, said: “The legislated timetable for increases in SPA was based on expectations of longevity that have since been revised.

“In the face of increased life expectancy, making no change to the timetable for the increase in SPA to 66 risks the sustainability of the state pensions system,” he added.

The announcement comes just one week after Business Secretary Vince Cable unveiled a proposed reform of Britain’s state pension system, with the introduction of one universal payment.

This would replace the current system of earnings-related “top-up” payments, plus additional means-tested benefits.

According to many, it should make pension planning easier to understand – stripping out the complex means-tested payments system, which many do not claim for.

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