Several voices in the pensions industry have expressed their concern at the proposals to implement a “radical timetable” for the state pension age.

An independent review of the state pension age by Sir John Cridland has recommended that the increase to 68 should be brought forward to 2039 from 2046. In addition, an accompanying report by the Government Actuary’s Department has suggested that the state pension age rise to 70 between 2054 and 2056.

Pensions and Lifetime Savings Association director of external affairs Graham Vidler said he was “concerned by the proposal to accelerate the rise of state pension age to 68”.

“This proposal will hit people in their late 30s and early 40s - the very group who are too young to have benefited from final salary pensions and too old to benefit in full from automatic enrolment. The government need to fully consider the consequences of this early rise for those who cannot stay in work until their late 60s.”

In addition, Royal London director of policy Steve Webb noted that if the government goes ahead with the “more radical timetable” set out in the Government Actuary’s review, then they would be “guilty of misleading parliament”.

“In the last Parliament MPs voted for the new arrangements on state pension age increases on the basis that people would spend two years in work for every one year in retirement. On this basis, no one at work today would have a pension age of 70. But on the more aggressive schedule that the government is considering, everyone in their twenties would have a pension age of 70.

“This is not what parliament voted for and is clearly driven by the Treasury. It is one thing asking people to work longer to make pensions affordable, but it is another to hike up pension ages because the Treasury sees it as an easy way to raise money.”

Just group communications director Stephen Lowe stated that the state pension age is used as a natural target for people to focus on, but the later this is, the more likely people are to be forced to stop work earlier.

“Offering concessions and support for those unable to work past 67 recognises this problem but perhaps not the scale of it. Today, more than half of people are not in work in the year before they reach state pension age. In fact, one in four men and one in three women reaching state pension age today has not worked for five years or more.*

“The more you push back state pension age, the bigger this ‘gap’ becomes for those forced to retire early and the longer they need to rely on their own resources until state pension kicks in.

Focusing on the need for people to be able to bridge the gap between the state pension age and the age at which they want to retire, NOW: Pensions director of policy Adrian Boulding noted that people will now have to save more into their occupational pensions.

Therefore, he added that NOW:Pensions believes that increasing the auto-enrolment contributions past 8 per cent is something that needs to be addressed in the 2017 review.

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