Chancellor announces early increase in pension age

| November 29, 2011 | 0 Comments
Chancellor announces early increase in pension age

In today’s Autumn Statement, or pre-Budget report as it used to be called, the Chancellor announced an earlier than expected increase in the pension age to 67.

The previous Labour government had planned to increase the state pension age to 67 between 2034 and 2036, followed by a further increase to 68 between 2044 and 2046.

However George Osborne today revealed that the rise to 67 will be bought forward by eight years to 2026, which will mean people who are currently aged between 42 and 52 having to wait a year longer than they expected.

With the median age of Britons increasing and public finances stretched to breaking point, the move is designed to ensure the long-term future of the basic state pension.

In his statement, Mr Osborne also confirmed that the basic state pension will increase by £5.30 per week to £110.40 in April, in line with the consumer price index measure of inflation, which stood at 5.2 per cent in September.

Men born before 6 December 1953 currently receive their state pension at the age of 65.

Women previously received their state pension at the age of 60, but it is being increased to 65 by November 2018.

After this date, the age for both men and women to receive their pension will start to increase to reach 66 in October 2020.

In the future, the Government plans to link the state pension age to life expectancy, which could eventually meant people having to work until well into their 70s.

Yesterday, Treasury minister Danny Alexander told BBC Radio 4 that the government has entered into a deal with major UK pension funds which should help to boost the UK’s economy.

Around £20 billion of pension fund investment will be for infrastructure projects, including roads and railways.

Around £5 billion of government money will also be redirected to these projects by 2015.

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