Comment on Cridland review of State Pension: 'No surprise some tough choices needed to be made...'
The government has published the final report of the independent review of State Pension age, led by John Cridland CBE.
The key recommendations are –
- Bring forward the increase to state pension age to 68 (previously taking place between 2044 and 2046) to between 2037 and 2039
- Do not allow flexible access to the state pension before people reach state pension age
- Remove the triple lock from 2020
Government is expected to make final recommendations for any changes in May.
These recommendations are set against a backdrop of an aging population, with estimates suggesting the population of over 65s is set to grow by 61% between 2015 and 2045, from 17.8% of the population to 24.6% of the population.
Andrew Tully, pensions technical director, Retirement Advantage commented:
‘Set against a backdrop of an ageing society, costs for funding the state pension are predicted to rocket by 39% to £152bn a year by 2028, so it is no surprise some tough choices needed to be made with the Cridland review suggesting accelerating increases to the state pension age, and removing the triple lock from 2020 onwards.
‘Many people believed the review may recommend more flexible access to the state pension at a reduced rate. This is not being taken forward at this point. Any change would have introduced significant complexity, particularly around helping people decide the optimal age to start taking their pension, and may have meant many people having less income in older age when they may need to help fund care costs, whether that is in the home or residential care.
‘Despite the increases to state pension age currently taking place and the acceleration of future increases, our Retirement Sentiment Index shows future retirees continue to plan for a retirement age of 65, even though that is highly likely to be before their state pension age. Future generations expectations will need to be managed and it is crucial the government learn lessons from recent experience to ensure future changes are clearly and widely communicated.’
The current position
Historically the state pension has been paid at age 65 for men and age 60 for women
Women’s state pension age is currently increasing from 60 to 65 between 2010 and 2018
State pension age for all will then gradually increase from 65 to 66 between 2018 and 2020
State pension age for all will further increase to 67 between 2026 and 2028