Millions to retire later under state pension age increase 68 plans
The government has put forward proposals to bring the retirement age forward by at least seven years to 68, the official spending watchdog has claimed.
Millions of people will face an extra year of work under the plans, with the Office for Budget Responsibility (OBR) saying “current policy” is to move the increase from 2044 to 2037.
In its latest report on the country’s spending, the OBR states that the Treasury approved the decision, even though the planned increase was not included in the legislation.
Under the Pensions Act 2007, the notional policy of increasing the state pension age to 68 from 2044 to 2046 remains valid. This remains the official guidance for current workers.
But the change means around five million people currently aged between 49 and 55 will have to work an extra year to qualify for the state pension. At the current annual rate this will cost them £12,500.
However, HM Treasury said this was not true and that the change was committed by the previous government but never came into force. A spokesman said: “The law provides for Progressive Pension to be increased to 68 in 2044. In July 2025, we announced the launch of the third review of the state pension age required by the legislation.”
The OBR report said: “We assume the state pension will rise to 68 in 2037-39 and then to 69 in the 2070s.”
The report also said that if the government followed the 2044 plan it would cost “on average an additional £6bn in today’s terms for each year the state pension age increase is postponed”.
Last year, a new review of state pensions was launched by Labor, in line with a legal requirement that it be held every six years. This board was chaired by the deputy director of the Retirement Policy Institute and the State Actuary Department, Dr. Directed by Suzy Morrissey.
But the recommendation to raise the state pension age to 68 from 2037 is based on the first such review, published in 2017 and triggered by then-prime minister Theresa May.
Any changes to the state pension age must be notified at least 10 years in advance; This means that a planned increase by 2037 should begin to become law next year at the latest.
Pensions Minister Torsten Bell has previously said the government has not made a final decision on raising the retirement age to 68.
Asked about the issue by the Work and Pensions Committee in March, he said: “We want to make sure that we have a sustainable state pension in the long term, because one of the most worrying things when you look at the data at the moment is the decline in confidence in the pension system.
“Fairness is a very central part of why the state pension exists, and the design features of the state pension show that it also depends on cross-party consensus.”
Economist Paul Johnson, former chief executive of the Institute for Fiscal Studies, commented: “Current legislation is that the retirement age will not rise until the mid-2040s. If it is the government’s firm intention for it to rise sooner than that, they need to say so publicly and start legislation quickly. “People need certainty and, ideally, at least a decade’s notice.
“However, it is the right thing to do. For decades the retirement age has not kept pace with rising life expectancy and these reasonably modest changes to the retirement age will help the government’s long-term fiscal position. But the government will also need to look at other areas, such as the triple lock, to ensure the state pension is sustainable in the long term,” he said. Times.
A Treasury spokesman said: “The previous government publicly committed to raising the state pension age to 68 between 2037 and 2039, and the OBR has reflected this position for years. The state pension age review, which will consider what the state pension age schedule should be in the coming decades, is currently ongoing and we cannot predict the outcome.”
The planned increase in the state pension age to 67 started in April this year and affected all workers born after April 1960.
