Ministers should “suck the nettles” on raising the retirement age to 68 in the first two years of the next parliament, Mel Stride, the work and pensions minister, has suggested.
Postponing the decision because life expectancy has stalled, Stride said the decision still has to be made, but it will likely be a decision for his successor and people will still get 10 years’ notice.
He also said there were “currently no plans” to change the triple lock on pension increase in the next Conservative statement, but stopped short of ensuring it would be kept.
Stride made the remarks while addressing reporters at a lunch in Westminster, when asked if the government would try to reconsider its plans to raise the retirement age in the future in light of the riots and protests in France.
The Minister for Work and Pensions, a close ally of Rishi Sunak, said: “I don’t think it is in our patriotic mind to start rioting and burning things over the state pension. In the end I made the decision (to postpone) because of the Covid situation, economic uncertainty and the fact that the important thing is to give people 10 years notice of any change.”
The range of dates for raising the state retirement age from 67 to 68 is a good stretch through 2030: you’re debating the 30s, 40s, or thereabouts. There is no reason why the decision should be made now; You can wait until the first two years of the next parliament, make that decision and give people 10 years notice.”
However, he said the decision still needs to be made.
“There’s a real tension because if you look at the balance sheet office’s financial sustainability reports projecting 50 years … demographic changes and pension costs are really tipping in the wrong direction. So there’s a point in time when nettles have to be grasped, but they don’t even have to be caught.” Someone other than me works in (the job), ”said Stride, indicating that he does not see himself working as a pension secretary after the next election.
Asked about the triple lock-up of pensions, which guarantees payments rise as high as inflation or earnings or 2.5%, Stride said there were “currently no plans” to drop it in the next Tory election manifesto. “I think the triple lock is a decision of the prime minister and others, and there are no plans to change the triple lock,” he said.
This year retirees will see a record 10% growth at a time when wage growth is only around 5.5% amid rising inflation.
Under current plans, the government retirement age of 66 is set to rise to 67 in a phased introduction between 2026 and 2028, and then to 68 between 2044 and 2046 – affecting people born after April 1977.
A 2017 government review suggested bringing the latest range forward to the late 2030s, forcing millions of people born in the early 70s who expected to retire at age 67 to wait another year.
Reports in January claimed that ministers planned to bring this increase forward to 2035 – affecting people under 54 – in response to pressure from the Treasury hoping to save billions of pounds in state pension payments.
However, with a general election expected in the autumn of next year, ministers feared a potential backlash to change from middle-aged voters. Riots in France over the planned increase in the country’s retirement age from 62 to 64 have also alarmed officials in the United Kingdom.