A decision on whether to bring forward the date of an increase in the state pension age to 68 have been delayed by Rishi Sunak’s government until after the 2024 general election.
Work and pensions secretary Mel Stride announce the delay in the Commons on Thursday, when he told MPs a further review would undertaken within two years of the next parliament.
Mr Stride had expected to delay any decision, amid falling life expectancy rates and riots in France over Emmanuel Marcon’s plan to raising the retirement age from 62 to 64.
The UK state pension age is due to rise due to 68 from 2044, but reports earlier this year suggested ministers could follow recommendations of an independent review to bring that forward – potentially as early as 2037.
There was growing speculation in recent weeks that any plan to bring forward the rise would be pushed back until after the election due to concerns about a backlash from middle-aged voters.
Mr Stride said the current rules for the rise from 67 to 68 in 2044 “therefore remain appropriate and the government does not intend to change the existing legislation prior to the conclusion of the next review”.
He added: “I therefore plan for a further review to be undertaken within two years of the next parliament to consider the rise to age 68 again.”
The respected Institute for Fiscal Studies (IFS) think tank has warned that every year of delaying the raise the age to 68 after 2037 would cost the Treasury between £8bn and £9bn.
Mr Stride suggested it was still possible for the state pension age to be hiked to 68 by 2037 – saying the review being in 2026 wouldn’t “preclude” decisions for the date.
However, the minister said the increase in life expectancy had slowed since the first state pension age review was undertaken in 2017, citing “the level of uncertainty about the data on life expectancy” as part of the reason for the delay.
The UK government’s actuary shows that life expectancy at retirement for Britons is now two years lower than when ministers last reviewed the state pension age in 2017.
Labour said stalling life expectancy rates which partly led to a decision on raising the state pension age to be delayed are a “damning indictment” of the government.
Work and pensions secretary announced delay on Thursday
Saying the decision was “the right one”, shadow work and pensions secretary Jonathan Ashworth said: “But it is the clearest admission yet that a rising tide of poverty is dragging life expectancy down for so many.
“And stalling life expectancy – going backwards in some of the poorest communities – is a damning indictment of 13 years of failure which the minister should have acknowledged and apologised for today.”
Jacob Rees-Mogg, former Tory business secretary, said postponing the age decision was “not exactly sign of strength”, arguing that making it now would “give everybody the chance to plan well in advance”.
Speaking in the Commons, he said: “Unlike the Labour party I don’t welcome this decision. That life expectancy from retirement from the 1940s to today has increased by seven years, which would indicate a retirement age of 72 rather than of 67 or 68.”
Jon Greer, head of retirement policy at Quilter management firm, said the delayed decision suggested that the Tories were “determined to try and claw back some public favour”, adding: “Any increase would have proven incredibly unpopular.”
France has seen a huge wave of strikes and violent protests against Mr Macron’s push to move back the country’s legal retirement age from 62 to 64.
Unable to get a majority in parliament’s lower house for the unpopular reforms, Mr Macron rammed them through using a special constitutional power – further inflaming protesters’ anger.
The Baroness Neville-Rolfe review of the UK state pension age is looking at which factors should be taken into account. The age is current based on preventing Britons from spending more than a third of their adult life in retirement.
The current increases set out in law are a gradual rise of the state pension age to 67 for those born on or after 5 April 1960. Between 2044 and 2046, there will be a gradual rise to 68 for those born on or after 5 April 1977.
