Government announces review of state pension age

A review of the state pension age has been announced - prompting experts to warn people to expect to work for longer before they start to get a payout.

Former CBI director general John Cridland has been appointed as independent reviewer of state pension age, Pensions Minister Baroness Altmann announced.

The review will consider changes in life expectancy, wider changes in society and "help ensure that the state pension remains sustainable for generations to come", the Government said.

Financial services firm Hargreaves Lansdown suggested those joining the workforce today may find themselves having to wait until their mid-70s to start drawing the state pension.

The 2014 Pensions Act requires the state pension age to be reviewed during each Parliament. This will be the first such review to take place.

The review will not cover the existing state pension age timetable to April 2028, the Government said. Mr Cridland will report in time to allow Government to consider the recommendations by May 2017.

Baroness Altmann said: "As our society changes, it is only right that we continue to review state pension ages and take into account the relevant factors to make sure that the state pension is sustainable and affordable for future generations."

Mr Cridland, who is currently chair of board of Transport for the North, said: "I am delighted to be the first independent reviewer of state pension age."

Tom McPhail, head of retirement policy at financial services firm Hargreaves Lansdown, said: "We fully expect state pension ages to go up faster than currently planned, and those joining the workforce today are likely to find themselves waiting until their mid-70s to get a payout from the state system.

"This is simply a function of the big jumps we continue to see in life expectancy, which the state pension can't hope to support without costs spiralling out of control.

"Whatever decisions they make, the Government needs to make sure they communicate them very, very clearly so individuals can plan their retirement savings with some certainty about what they will get from the state, and when they will get it."

Owen Smith, shadow work and pensions secretary, said: "People are right to worry that the terms of this review may suggest that the Tory Government is set to speed up rises in the state pension age, throwing into chaos the retirement plans of millions of British workers."

People, charities, businesses, research groups and other interested parties are invited to share their views on the state pension age review by emailing: spa.review@dwp.gsi.gov.uk.