Budget 2010: Pension age

Elderly Worker

New plans unveiled by the Coalition Government have detailed their intentions to drastically speed up the rate at which the state pension age goes up.

The accelerated plans mean that the state pension age for men could go up to 66 as soon as 2016, which is eight years earlier than previously planned. The Government is also thought to be considering a hastened raise to a pension age of 68, something the past Labour Government did not see happening until 2046. The first people to be affected by the new age will be men who are currently 59 years old.

The state pension age for women is currently going through a gradual rise, with 2020 earmarked as they year it will hit 65, at the moment it is unclear if the Government will raise the women’s age to 66 as well.

The Government also plans to scrap the laws that allow employers to refuse work to people aged 65 or over.

The official line on the age increase is that the pension age needs to go up because people are living for longer than ever before. Ian Duncan Smith, the work and pensions secretary, said: “People are living longer and healthier lives than ever, and the last thing we want is to lose their talent and enthusiasm from the workplace due to an arbitrary age limit. We also need to recognise that to meet the challenge of providing an affordable, stable pensions system in a society with ever increasing life expectancy, people will need to work longer.”

However, the news has not received the greatest of fanfare, with several groups hitting out at the plans. Concerns have been voiced over a “class bias” in relation to the notion that people are living longer and thus should work longer. Paul Kenney, general secretary of the trade union GMB, said: “The government knows that manual workers in the industrial regions of the UK do not enjoy anything like the same life expectancy as professionals or other classes or employees. To force someone who has done a lifetime of toil on building sites, farms or in factories to work until they are 66 is completely unacceptable.”

The National Pensioners Convention expressed a similar view, claiming that the idea that people are living longer lives and have good employment prospects after the age of 65 is “a myth”.

Some people see the changes as a necessary development, Ian Naismith, head of pensions market development at Scottish Widows, said: “We live in an ageing society and we will all have to work longer, a need which has only been increased by the economic climate of recent years. Raising the state pension age will give added encouragement to plan for a longer working life.”