Spending Review – some pension reforms to salute for a change
So the Spending Review has now been and gone. I won’t dwell on the more general elements here, but I will cast an eye over the pension changes announced – less than a week after the last set of pension reforms.
In summary, the State Pension age for everyone will rise to 66 by 2020. Not too big a deal, you might think, since it’s currently 65. However, there are two important points here. Firstly, 2020 is six years ahead of the previous proposed rise to 66. And secondly, the minimum retirement age for women is currently 60, so women will see a significant increase in a relatively short space of time.
In my opinion, the rise from for men from 65 to 66 (to be phased in between 2018 and 2020) is not a moment too soon. When the State Pension was introduced, life expectancy at 65 was for a further four years; it is now 22 years and rising. That is unsustainable. I often advise people planning for their retirement now to expect something very different by the time they get there.
In fact, I believe that the government should be acting more decisively: more substantial rises implemented more quickly. However, as is always the case with these matters, the first step is always the most politically sensitive. Once the retirement age has changed once, it will undoubtedly be moved further at a future date without much reaction.
However, I do think it’s unfair for women to bear the biggest brunt in seeing their retirement age rise six years over the next ten. If ever there’s evidence that equality is a double-edged sword, this is it. If the government were to act more decisively, then perhaps retirement age equality could be given longer to implement. That sounds ‘fairer’ to me.