State pension age rise ‘unlikely to be well received’

Jeremy Hunt is reportedly exploring bringing forward the age Britons are allowed to access their state pension. This rumoured change could be announced as part of the Spring Budget next week and would prove controversial as those in their 50s will have to wait even longer for payments.

Ray Black, a chartered financial advisor at Money Minder, outlined what raising the state pension age quicker than expected would look like.

He explained: “Once again the state pension age is under review so over 50s will be looking towards the budget with interest to see if we could hear more about the Government’s plans for this.

“If the Chancellor announces the increase in the state pension age is being brought forward by 10 years, it could affect everyone born after April 6, 1967.

“This action has the potential to save the Government billions, however, it’s not a short-term gain that will put money into either their purse or the voting public’s pocket now.”

Currently, the state pension age for both men and women is 66 but will rise to 67 by 2028 and will then increase to 68 between 2044 and 2046.

Despite this, there has been much speculation that the state pension age could rise to 68 years old sooner than expected.

It should be noted this is not a new idea and the Government has always said the timetable may be subject to change.

However, a Government spokesperson previously told “No decision has been taken on changes to the state pension age. A review will be published in early 2023.”

The Treasury is reportedly looking into increasing the state pension age to 68 as early as 2035.

If this were to be applied, those who are currently 55 will be primarily affected by the decision.

Any changes to the retirement age threshold are based on life expectancy data in the UK and are carried out to save the Government money.

Recent data has shown that improvements in average life expectancy have reversed since the pandemic.

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With this in mind, having Britons wait longer for their state pension is likely to not be a popular decision.

Money Minder’s financial expert warned of the potential backlash from the public which could arise if it eventually carried out.

Mr Black added: “As such, I would normally expect this kind of announcement (which is unlikely to be well received by those affected) to be made in the early years of a new Government.

“This gives plenty of time before the next general election for people to have forgotten about it, rather than being at a time when politicians are mainly focused on gaining votes, instead of losing them.

“Even if the state pension age is not mentioned on March 15, the Government has already told us they plan to review it later this year, although this could of course be postponed until after the next general election if they felt that it would be better to leave it for now.”

Despite this, state pensioners are to receive a significant payment boost later this year with the result of the triple lock,

Payments are set to rise by 10.1 percent in line with the Consumer Price Index (CPI) rate of inflation for September 2022 as a metric

As such, new state pension claimants will be in receipt of over £200 a week, or over £10,000 annually.

However, there are still questions over the long-term affordability of the triple lock, another issue the Government may have to consider, experts have warned.

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