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Pension age rise delays retirement

Millions of workers will have to rethink their retirement plans after the Government announced that the state pension age will rise to 67 from 2026, 10 years earlier than previously intended.

Chancellor George Osborne said the move, which will save the Treasury around £60 billion between 2026-27 and 2035-36, was to tackle the costs of rising life expectancies.

Age UK charity director Michelle Mitchell was critical of the move, saying: "The decision to speed up the timetable to increase the state pension age to 67 will come as a bitter blow to many people fast approaching retirement, especially those in ill health, caring for relatives and those out of work."

However, there was a slice of good news for current pensioners, with the state pension rising by 5.2 per cent, in line with consumer prices index inflation - meaning a weekly rise of £5.30 to £107.45 from next April.

The increase means the Government has stuck to its "triple lock" promise in which state pensions must rise annually by average earnings growth, inflation or 2.5 per cent, whichever is greatest.

Copyright © Press Association 2011

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