The UK Government has thrown another curve ball at the overburdened British taxpayer with the announcement that its plans for a progressive raising of the retirement age will be accelerated.
Implementation of the retirement age of 67 will now be brought forward from 2034 to 2026. Under the new rules, men and women born after April 5, 1961 will retire no earlier than 67. Eventually that will be raised to 68.
The State Pension Age, or SPA, is the earliest age at which a British taxpayer can draw the State Pension.
The new announcement throws younger workers planning for their retirement into uncertainty, with Liberal Democrat minister Steve Webb saying the people in their twenties or thirties should not rely on getting the State Pension at any particular age because there are likely to be more changes to the system.
With the ballooning cost of pensions as the bulging demographic of the baby boomer generation reaches retirement age, the government is keen to pull those costs under control.
Speaking to The Telegraph this week, Webb threw the blame on workers, saying that almost ten million people weren’t saving enough for their pensions. He also said that the retirement age, currently pegged at a maximum of 68, could change further and that changes would be linked to life expectancy.
Experts from accountants PwC have warned that people beginning their working life today could expect to work until they are about 72.
HM Revenue and Customs is quick to point out on its website that State Pension age is not the same thing as retirement age, generously suggesting that workers can continue to work even after reaching the age at which they can claim their pension.
However when announcing plans for raising the retirement age earlier this year, the government said that the default retirement age would be phased out and that employers would no longer be able to dismiss staff just for reaching the age of 65.
However, said Employment Relations Minister Edward Davey that employers could still force people to retire if they could not longer do their jobs.
Updates on UK Retirement Age
Age UK has long campaigned for the scrapping of compulsory retirement claiming it treated older workers as second class citizens. The organisation said that its campaign was about choice, claiming that in 2009 alone about 100,000 workers were forced to retire against their wishes. It has published research showing that nine out of ten people aged between 60 and 70 are against forced retirement.
Despite its opposition to forced retirement, Age UK is having a bet each way by opposing plans to raise the pension age, saying that there were still many people who felt they deserved to retire after a life of hard work.
Steve Webb also hedges his bets by raising the possibility that pension ages could go down again at some point, adding that it was difficult to predict what would happen in another half-century.