State pension age hike in doubt after election

State pension age hike in doubt after election

An aggressive increase in the state pension ages looks unlikely following the inconclusive general election result, according to industry experts.

The government has a legal duty to announce its plans for the state pension age following the Cridland report, which was temporarily shelved because of pre-election purdah rules.

The Cridland Independent Review of the state pension age in March recommended that the state pension age rise to 68 by 2039 instead of 2046.

Article continues after advert

So, anyone aged under 45 today might have to wait until at least age 68 before getting a state pension if it were implemented. This could affect around 5.8 million people.

Meanwhile, the Government Actuary’s Department (GAD) recent report points to a state pension age of 70 for anyone born after 6 April 1986 (those aged 30 today or younger). 

Hugh Nolan, president of the Society of Pension Professionals and director of Spence & Partners, said if Prime MInister Theresa May, whose Conservative party has the most seats but not a clear majority following the general election, has any sense at she should run for the hills and not mention the Cridland report.

Steve Webb, director of Policy at Royal London, said the loss of its majority in the House of Commons will make it much harder for the Conservatives to go for an aggressive schedule of pension age increases.

The Cridland recommendations were generally seen as something of a 'middle way' and may still form the basis of the plans of the new government, but it will be a test of their political strength to see if even these relatively modest proposals are blocked."

Association of Consulting Actuaries chairman, Bob Scott, said a quick decision on the state pension age was required.

Mr Scott said a decision, delayed because of the election, on whether the state pension age increase to age 68 will be brought forward and how future changes might then progress, now looks to be in serious doubt.

He said whether there will be any increase to the state pension age at all beyond current plans without a further review now looks unlikely.

As this article was published, it was understood the Conservatives had reached an agreement with the DUP.

Tom McPhail, head of pensions policy at Hargreaves Lansdown, said given the DUP support for Waspi and the triple lock, any changes to the state pension age may now be open to re-negotiation.

Steven Cameron, pensions director at Aegon, agreed that now the Conservatives have had to court the DUP the government may have a different view on Cridland's recommendations today than it did a few weeks ago.

Mr Cameron said: "Something as important as the future state pension age needs to be considered in the wider context of government plans and budgets, including the future of the triple lock which looks like being up for grabs. The government's immediate priorities will be commanding a working majority and on Brexit negotiations.