Government announces changes to pension age
The UK government has today brought forward the increase in state pension age to 66 years from 2020 which is a significant six years earlier than previously indicated. Buried in the back of the comprehensive spending review there are also plans to accelerate the increase to 68 years with an option to increase the pension age above and beyond 68 years. So what will this save the UK government in the medium to longer term?
It is believed that the initial change to 66 years by 2020 will generate around £5 billion in additional spending capacity for the UK government and affect around 5.1 million people in the UK. The savings figure between 2015 and 2025 rises to around £30 billion with the UK government looking to reduce both taxpayer and state liabilities in the medium to longer term. While there is no doubt that the state pension has reduced in strength over the years, and did need to be reformed in some shape or form, perhaps the authorities should be looking towards public sector pensions which still continue to eat up significant tax revenues.
There is no doubt that the UK authorities have taken some very tough decisions today, some which will ultimately cost them votes in the years to come. However, whether we will look back in due course and maybe appreciate more the efforts of George Osborne remains to be seen.
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