State pension age will need to rise faster, Government says

The Pensions Bill, currently before Parliament, will raise the age at which men and women can claim the state pension to 66 by 2020. However the retirement age could increase further as early as 2026, a minister has warned.

In an interview with the Observer newspaper, pensions minister Steve Webb expressed concern that the timetable proposed by the previous Government was too slow.

Currently the state pension age is due to rise to 67 in 2036 then to 68 by 2046.

"If it is 67 in the mid 2030s we will be going backwards in terms of share of your life in retirement. I mean the problem would be worse than 20 years before," Webb told the newspaper.

The Department for Work and Pensions (DWP) said that no decision had been taken on how the state pension age was set to increase but added that an automatic mechanism was being considered.

"We've been clear that the current timetable for moving the State Pension age to 67 is too slow due to the staggering increases in life expectancy and are committed to reviewing the date. We are continuing to look at how pension ages beyond 66 will be set, including considering an automatic mechanism - no decision has been taken," a DWP spokesperson said.

The Pensions Bill will raise the retirement age for women to match that of men in 2018 before it rises to 66 for both sexes in 2020. The move is controversial because it will give 330,000 women only seven year's notice of up to two extra years in work before retirement, the Observer said.

Earlier this year the Government held a consultation on what further changes are needed to the state pension age. Plans for a new, more automatic mechanism for future increases based on regular, independent reviews were announced in this year's budget.

"Everybody knows we are living longer. It is like an express train. I am even more convinced now than I was a year ago that we are running to standstill on all this stuff," Webb told the Observer.