Tom McPhail in the Sunday Times has urged the DWP to “save” the state pension by “taking it away” from under-75s.
DWP told to ‘take away’ state pension for anyone under age 75
The Department for Work and Pensions (DWP) has been told to “save” the state pension by denying it for anyone under 75. The state pension age is currently being reviewed by the Department for Work and Pensions ( DWP ) and Labour Party government.
Tom McPhail in the Sunday Times has urged the DWP to “save” the state pension by “taking it away” from under-75s.
McPhail has nearly 40 years’ experience in the pensions industry. He spent 18 years at Hargreaves Lansdown, where he was head of retirement policy. He said: ” There’s a good argument that it should be about age 75; we’ll come back to that in a moment.”
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He went on to add: “Life expectancy is increasing, hence the expectation of a higher state pension age, but the complication is that it isn’t going up as fast as it was a few years ago. This would point to a slowdown in increases to the state pension age.
“There are various conventions around all this, such as that retirement should be about a third of our adult life, and that any increases to state pension age should be confirmed at least ten years before they kick in.”
He urged: “At this point and given the fiscal pressures, new solutions are needed. So I would go for a radical reset: keep the state pension universal — same rate for everyone, irrespective of where you live, how healthy you are or how rich you are — but also push the state pension age back to about 75.
“At this age, it would be possible to set it at a level where people could actually live on it. Send a clear message: your private savings are to cover the gap between stopping working and age 75.”
The OBR warned earlier this year: “As life expectancy has increased, successive governments have increased the state pension age (SPA). Over the past 15 years, the SPA has risen from 60 to 65 for women between April 2010 and November 2018, and then from 65 to 66 for both men and women between December 2018 and October 2020.
“Over the period of our latest forecast, the SPA will increase again from 66 to 67 for men and women between April 2026 and March 2028, as announced in the Pensions Act 2014 and confirmed by the Government in March 2023.
“This has a significant fiscal impact in the current forecast – we estimate its net impact is to reduce borrowing by £10.5 billion in 2029-30.”