The UK government today confirmed it will not accelerate a planned rise in the state pension age to 68.
Work and Pensions secretary Mel Stride will address MPs in the House of Commons on the decision today (30 March).
The state pension age is currently 66 and due to rise to 67 by 2028 and 68 by 2046.
Ministers were rumoured to be considering an accelerated rise to 68 that could have forced people in their late 40s and early 50s to wait up to an extra year for their state pension
Tom Selby, head of retirement policy at AJ Bell, said: "Given we have literally seen rioting on the streets in France in response to a proposed rise in the state pension age, it comes as no surprise that the UK government has backed away from the idea of accelerating a planned rise in the UK state pension age to 68.
"With less than two years to go until the general election, hiking the state pension age faster would likely have been political suicide for the Conservatives, who are already trailing Labour in the polls.
"The decision will come as a huge relief to people in their late 40s and early 50s who could potentially have been forced to wait an extra 12 months to receive their state pension as a result.
"Increasing the state pension age faster now would also arguably have been unfair, as average life expectancy has actually fallen recently, while forecasts of future life expectancy improvements have also been significantly scaled back. Given improving life expectancy is one of the primary justifications for raising the state pension age, accelerating the planned rise to age 68 when life expectancy has dipped would be an extremely tough sell, to put it mildly.
"However, this might not be the end of the story, with the government expected to say it will push any decision beyond the election. If life expectancy growth returns by then, the next administration will likely be left grappling with this thorny issue once again."
Jon Greer, head of retirement policy at Quilter said: "The Tories understandably look determined to try and claw back some public favour amongst its core voters by delaying its widely anticipated state pension age increase. Any increase would have proven incredibly unpopular and we may see more of these crowd pleasing policies as we head towards the general election.
"The plan to delay has been reportedly due to average lower life expectancy. However, it is forecast that the number of people over State Pension age will grow significantly over the next 20 years whilst the proportion of the working age population to support them will start to fall.
"The delay to increasing the age therefore does put the state pension's long term sustainability into the spotlight and this could be the government simply kicking an inevitability down the road for the next party to take government to deal with. Overall the Government aspire to aim for ‘up to 32%' in the long run as the right proportion of adult life to spend in receipt of the State Pension. As a compromise if they choose not to raise the age then it does not leave the Government with many levers it can pull."
He continued: "The IFS suggest that a one-year increase in the state pension age in the late 2030s would likely save around £8-9 billion a year in today's terms. However, delaying the planned rise in the state pension age to 68 by seven years would cost at least £50 billion.
"It may leave the Government with the choice of reviewing the triple lock and replacing it with a less generous uprating mechanism and/or accepting that funding for state pensions is going to increase through higher taxes (or national insurance). But it's a question of what the general public would dislike least because we face difficult decisions."
"For those worried that this delay is a short-term solution it should be known that the framework for reviewing the State Pension age sets out that there should be a minimum of 10 years' notice for individuals affected by changes so that they can adequately plan."
Greer further said: "There should therefore be no immediate concern for anyone. However, upping contributions to a pension can help make sure that if you do end up having to wait longer to access you state pension then you have enough private pension wealth to bridge the gap.
"Alternatively, you may want to save into different savings vehicles like ISAs so that you can draw on that before you reach an age when you can get access to the state pension. The most important piece of advice is to take ownership and make a plan; don't leave it too late."
