Pensions - Articles - Raising Pension Age to 67 should be part of new measures

 Does talk of state pension age rising to 67 by 2026 herald Government rethink on Pensions Bill timetable in face of backbench rebellion? Both Steve Webb, Pensions Minister and Iain Duncan Smith, Secretary of State for Work and Pensions, are suddenly talking about bringing forward the increase in state pension age to 67, perhaps by 2026. Doing this would allow the Government to put right the injustice contained in the current pensions bill, which already faces a backbench rebellion over the plans to raise state pension age to 66 in 2020.

  

 Backbenchers have insisted on new proposals due to unfairness and inadequate notice Backbenchers believe, rightly, that the current plans - apart from breaking a specific pledge in the Coalition Agreement, do not give people fair notice of the change - in particular, women who are already aged 57 or 58 are having their pension increased by up to 2 years under the current Pensions Bill plans.

  

 New timetable with pension age at 66 in 2022 and then 67 thereafter, still saves over £30bn: However, if pension age increase was delayed so that it only reaches age 66 in 2022, followed by a rise to 67 in the following few years, then the Government would have a fairer package of measures. It would give people much fairer notice (over 10 years) and would still raise even more money than the current proposals.

 Need independent assessment of future pension age rises: It is, of course, clear that state pension ages will have to rise, but state pension age increases need to be properly and carefully planned, giving people enough notice, rather than imposed ad hoc by Government diktat. We need an independent inquiry to set up a fair system for increasing future pension ages.

  

 Fairness for lower earners?: Just increasing pension age is not necessarily fair. Many lower earners, for example, started work at 15 and have had hard physical manual jobs which leave them with shorter life expectancy. They will lose out significantly from higher pension age relative to better off workers. This issue needs to be considered carefully.

  

 Government has a chance to rethink current unfair plans and have better timetable: Bringing forward the increase to 67 by 2026 will however allow the Government to undo its terribly unfair plans that were hastily announced in the Pensions Bill. Having promised in the Coalition Agreement that it would not increase state pension age beyond age 65 before 2020, it went back on that promise and announced increases for some women in their late fifties and they have not had enough time to prepare. They have written to me in despair as to how they can manage at such short notice to prepare for a two year delay in their pension, having already accepted a four year rise in the 1995 changes.

 Win-win possible: By going back on its Coalition Agreement, the Government will be betraying millions of older women. However, by announcing a new timetable of increases further into the future, the Government could act more fairly and honestly, as well as saving more money! Quite a win-win!