Queen’s Speech 2012: Children born today ‘will work to 80’ under pension reforms
A planned increase in the retirement age to 67 will be brought forward to between 2026 and 2028, after which it will be linked to longevity for future retirees. Children born today may not be able to retire until they are 80.
A separate piece of legislation was also unveiled which will overhaul the pensions offered to public-sector workers, which will in future be calculated on the basis of “career average” earnings rather than a final salary. The schemes will also become cheaper for the taxpayer. The changes have been bitterly opposed by the trade unions in recent months.
The reforms to the pension system were one of the few radical pieces of legislation to be announced in yesterday’s speech. Successive governments over the past decade have grappled with the problems of the complicated state pension and the increased cost of retirement because of sharp increases in life expectancy.
The Government briefing on the changes said it is “committing to ensuring that the state pension age is increased in future to take into account increases in longevity”.
The measures will run alongside a drive to tackle the pensions savings crisis, which will see up to 10 million people automatically enrolled into workplace schemes from this autumn, starting with larger companies.