The State Pension Age is increasing again for some people. If you are 47 or younger you have to save a little more if you want to retire at the age you had planned. If I were you I would also prepare for that to be changed again before you get to retirement.
John Cridland was recently commissioned to produce a report on the state pension age. In it he said that the State Pension Age should rise from 67 to 68 between 2037 and 2039. (which is earlier than is currently the case). Initially it was uncertain that the government would take up this recommendation. However, today, the secretary of state for work and pensions David Gauke has said the government accepts this recommendation and the state pension age (SPA) will rise to 68 seven years earlier than previously planned.
Current legislation states that from December 2018, the State Pension Age for men and women will increase to 66. It will then rise to 67 between 2026 and 2028 and to 68 between 2044 and 2046.
Earlier this week the Guardian reported that the rise in life expectancy had stalled since 2010. The article on Tuesday 18th July stated that Life expectancy at birth had been going up so fast that women were gaining an extra year of life every five years and men an additional 12 months every three-and-a-half years. But those trends have almost halved since ministers made a “political decision” in 2010 to reduce the amount of money it put into the public sector, said Sir Michael Marmot. The upward trend in longer life that began in Britain just after the first world war has slowed so dramatically that women now only gain an extra year after a decade while for men the same gain now takes six years to arrive.
The rate of increase was “pretty close to having ground to a halt”, Marmot said.
“I am deeply concerned with the levelling off; I expected it to just keep getting better. Since 2009-2015 it’s pretty flat, whereas we are used to it getting better and better all the time,” added Marmot, who published a major review of health inequalities for Gordon Brown’s Labour government in early 2010.
In 1919 men lived for an average of 52.5 years and women for 56.1 years. That rose to 64.1 years and 68.7 years respectively by 1946. Life expectancy then rose in an almost unbroken gradual upward curve to 77.1 years for men and 81.4 years for women in 2005 and again to 78.7 and 82.6 in 2010, the year David Cameron’s Conservative-Liberal Democrat coalition took office. – Since then life expectancy has continued to creep upwards, but at a slower rate, according to Marmot’s latest analysis. In 2015 average life expectancy in Britain was 79.6 years for men and 83.1 years for women, according to the latest Office for National Statistics data. Marmot, who is the director of the Institute of Health Equity at University College London, denied the rise had stalled because there was a natural limit to how much life expectancy can increase. “It is not inevitable that it should have levelled off,” he said. Although this report by Marmot talks of slowing life expectancy it does show that men are living 27.1 years longer than we were in 1919.
In an article for the Financial Times last month Gauke said he was prepared to make ‘big decisions’ on pensions. Increasing the state pension age is obviously unpopular, some would say it should have been done many years ago and much more progressively but a desire for governments to avoid doing too many unpopular things has meant that successive governments have done too little on this in the past.