The state pension drifts further away

Millions of Britons born between 1970 and 1978 will have to wait up to a year longer than expected to claim their state pension benefits.

Millions of Britons born between 1970 and 1978 will have to wait up to a year longer than expected to claim their state pension benefits under proposals unveiled last week. The government intends to implement the recommendations of former Confederation of British Industry boss John Cridland, whose report into the expense of state pensions concluded earlier this year that the current projected costs were not sustainable.

This means that plans for an increase in the state pension age (SPA) from 67 to 68 previously scheduled for introduction between 2044 and 2046 will now come into effect seven years earlier, between 2037 and 2039. The reform will affect those currently aged between 39 and 47 (around six million of them), saving the government an estimated £74bn by 2045/2046. Today, the state pension age stands at 65 for men and 64 for women, but is due to increase gradually over the months and years ahead. Men and women will see their state pension age equalised at 65 in 2018, but this will rise steadily to 66 by 2026 and to 67 by 2037. Thereafter, the latest announcement will begin coming into effect.

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David Prosser
Business Columnist

David Prosser is a regular MoneyWeek columnist, writing on small business and entrepreneurship, as well as pensions and other forms of tax-efficient savings and investments. David has been a financial journalist for almost 30 years, specialising initially in personal finance, and then in broader business coverage. He has worked for national newspaper groups including The Financial Times, The Guardian and Observer, Express Newspapers and, most recently, The Independent, where he served for more than three years as business editor.