MILLIONS of people born between 1970 and 1978 will now have to work an unexpected extra year, after the government brought forward plans to push up the pension age.
Work and Pensions Secretary David Gauke told MPs that the state pension age for men and women will rise from 67 to 68 between 2037 and 2039, seven years earlier than previously planned.
The Government says it will save the country £74 billion by 2045/46, or £400 per household.
The SNP said it would have a hugely disproportionate impact on Scotland, where life expectancy is lower and where pensioners are already shortchanged by around £11,000 compared to the rest of the UK.
Oddly, Gauke said the move was prompted by increases in life expectancy.
He argued that those affected could still expect to receive more over their lifetimes than earlier generations.
But earlier this week former government adviser Sir Michael Marmot warned increases in life expectancy could be coming to an end, and that the trend towards longer lives was “pretty close to having ground to a halt”.
Gauke told the Commons: “Increases in life expectancy are to be celebrated, and I want to make clear that even with the timetable for the rise that I’m announcing today, future pensioners can still expect on average more than 22 years in receipt of the state pension.
“But increasing longevity also presents challenges to the Government.
“There is a balance to be struck between funding of the state pension in years to come whilst also ensuring fairness for future generations of taxpayers.”
The DWP said that under the previous timetable, Government spending on the state pension would have risen from 5.2 per cent of GDP now to 6.5 per cent in 2039/40. The new timetable reduces that figure to 6.1 per cent.
Latest projections show that the number of people over state pension age in the UK is expected to grow by a third from 12.4 million to 16.9m between 2017 and 2042.
Analysis carried out by the Scottish Government before the 2014 independence referendum claimed a 65-year-old woman entitled to a total pension of £160 per week could expect to get around £11,000 less in Scotland than counterparts in the rest of the UK as a whole.
For a woman who lives in Glasgow, this £11,000 pension gap increases to £22,000 less than in the UK, and when comparing Glasgow with Camden, which has the highest life expectancy for women in the UK, the pension gap is £46,000.
Under current plans, the state pension age for men and women will be equalised at 65 at the end of 2018, before rising to 66 in 2020 and 67 in 2028.
The SNP’s Kirsty Blackman said she and colleagues would work with other parties to defeat the change. The Aberdeen North MP said: “The SNP has long called for the establishment of an independent Savings and Pensions Commission to responsibly consider pensions policies to ensure they are fit for purpose and take into account demographic needs.
“It is utterly shameful that the Tory government could sneak an announcement that will hit people across the UK during the last week of parliament before recess.”
Labour’s shadow work and pensions secretary Debbie Abrahams described Gauke’s announcement as “an astonishing continuation of austerity that means 34 million people will work longer than under Labour’s plans”.
Abrahams added:”We cannot allow this Government to push people to work longer and longer to pay for its failed austerity agenda.”
The pension age for those under 39s has not yet been decided.
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