Outcry from people in 40s facing longer wait to retire

DAVID GAUKE: He said people affected would still benefit compared to earlier generations.

The state pension age for men and women will rise from 67 to 68 between 2037 and 2039, seven years earlier than previously planned, in a move designed to save £74bn by 2045/46, Work and Pensions Secretary David Gauke told the House of Commons.

Mr Gauke said that increases in life expectancy meant that those affected could still expect to receive more over their lifetimes than earlier generations.

But charity Age UK pointed out that his announcement comes just days after former government adviser Sir Michael Marmot warned that the trend towards longer lives was “pretty close to having ground to a halt” since 2010, after rising constantly since the Second World War. Labour said the change – in line with the recommendations of this year’s Cridland Report – would mean 34 million people working longer than they would under its plan to hold the retirement age at 66.

Under current plans, the state pension age for men and women will be equalised at 65 at the end of 2018, before rising to 66 in 2020 and 67 in 2028. The new change affects anyone born between April 6 1970 and April 5 1978.

The Department for Work and Pensions (DWP) said it would save the equivalent of £400 a year per household.

Age UK charity director Caroline Abrahams said: “In bringing forward a rise in state pension age by seven years, the Government is picking the pockets of everyone in their late 40s and younger, despite there being no objective case in Age UK’s view to support it at this point in time.”

Tom McPhail, of Hargreaves Lansdown, said there is still time for many people to adjust their retirement plans, by putting more into their pension or changing where they invest. He said: “We need a national savings strategy to help people save and invest for their future. A good starting point would be for the Government to look at a savings commission.”