Cridland clears way for state pension age hike to 70

Cridland clears way for state pension age hike to 70

The state pension age could increase to 70 by as early as 2057 if the government follows the recommendations set out in John Cridland's review of the state pension age.

In his long-awaited final report, released today (23 March) more than a year after the review was announced, Mr Cridland recommended raising the state pension age to 68 between 2037 and 2039.

After that, he recommended allowing it to increase in line with longevity expectations, but by no more than one year every decade. 

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That would mean the state pension age could reach 70 by as early as 2057 - affecting anyone born after 1987.

The Cridland report coincided with an independent Government Actuary’s Department report, which modeled the effect on the state pension age against two scenarios.

The first scenario assumed individuals would spend 33.3 per cent of their adult life (from age 20) in receipt of the state pension. In that case, state pension age would reach 69 by 2056. 

The second scenario assumed individuals would spend 32 per cent of their adult life in receipt of the state pension. In that case, state pension age would reach 70 by 2056. 

Currently, the state pension age is 65 for men and slightly less for women, raising to 66 for both by 2020.

Under the Department for Work & Pensions' current plans, it is due to reach 68 for both men and women by 2046. 

The report stated that the change would result in 6.7 per cent of GDP being spent on the state pension in 2066 to 2067, 0.3 per cent less than current forecasts.

“My review considers the consequences of an ageing society," Mr Cridland, who was director general of the Confederation of British Industry until 2015, said. 

"It addresses how we can afford to live a longer pensionable life, how we can work longer where this is necessary and possible, and where it is not, how to give assistance to those who need it.

"The aim is to smooth the transition for tomorrow’s pensioners, and to try and make the future both fair and sustainable."

In addition to his recommendations on the state pension age, Mr Cridland also recommended scrapping the triple lock on annual increases to the state pension, replacing it with a link to earnings. 

He also rejected proposals to allow early access to the state pension in some cases, saying a single state pension age was "simple and clear and provides a trigger for pension planning".

The report put forward a number measures to mitigate the potentially harmful effects of the proposed changes.

These included a "mid-life MOT" to help people plan their later lives, "addressing their lifestyle, their skills, paid and unpaid work, and their retirement income".

They also included additional means-tested support, more flexibility to allow part-time work alongside receipt of Universal Credit, and a "new drive to enable older workers to become apprentice mentors and trainers".