Pension age increase to 67 brought forward

Liberal Democrat MP Steve Webb said timescales set by the previous Labour administration, under which the pension age was to be increased to 67 in 2036 and 68 by 2046, were “too slow”.

Mr Webb argued more drastic action needed to be taken to avoid a major pensions crisis as the life expectancy of UK residents continues to rise.

He said: “Everybody knows we are living longer. It is like an express train. I am even more convinced now than I was a year ago that we are running to stand still on all this stuff.

“In a world [where] you are going to live into your late 80s, and before we know it 90s, we think now we have got to move on these things.”

Ministers are already pushing the Pensions Bill through parliament that will raise the age at which men and women can claim a pension to 66 by 2020.

But it has been reported that the retirement age could rise to 67 as early as 2026 – affecting millions of people in their 40s who would have expected to stop work at 66.

Mr Webb said previous governments had failed to address a huge increase in life expectancy and argued that bringing forward the rise in the state pension age was crucial.

“The timescales for 67 and 68 are too slow,” he said.

“If it is 67 in the mid-2030s we will be going backwards in terms of share of your life in retirement. I mean the problem would be worse than 20 years before.”

The MP added: “In a way, successive governments over the decades were so behind the curve behind all this.

“If you think of male pension age, it hasn’t changed for a century. How much has life expectancy improved in a century? So, in a way, what is going on is a big dam that is finally breaking.”

Public sector unions are threatening a second wave of industrial action over the changes that will see them pay higher pension contributions as well as work for longer.

Charity director of Age UK Michelle Mitchell said: “Any increase to the state pension age needs to ensure that people have enough time to plan for the change – Age UK believes that people require at least ten years’ notice.

“We also believe that the process of deciding the state pension age should be informed by independent advisers considering a range of factors.”

Work and pensions secretary Iain Duncan Smith insisted the coalition was yet to decide on the timescale for reforms.

He said: “We have been clear about this all along. The move to 67 will happen but the question only is on the timing, that’s all, and we haven’t made a decision about that yet.”

Chief secretary to the Treasury Danny Alexander said pensions needed to be “sustainable and afforded in the long term”.

He said: “We are all living longer and that’s a wonderful thing, but it means people have to work longer, it means people will have to wait longer to take their pensions.”

He said that strikes to preserve public sector workers’ pensions should be a last resort while negotiations with union leaders were ongoing.

“These are tough discussions we are having but we have been making progress in these negotiations,” said Mr Alexander.

“I’m fully committed to these discussions… to try to make sure we can get to a position where we reach reforms everyone agrees are necessary.”