State pension age to rise from 67 to 68 in 2037
Ministers calculate that the change seven years ahead of schedule will save £74 billion for taxpayers.
The state pension age will rise from 67 to 68 from 2037, Work and Pensions Secretary David Gauke has announced.
He told MPs the Government was accepting the recommendation made in the Cridland review earlier this year.
This brings the change forward seven years earlier than was initially planned.
Mr Gauke told the Commons that this timetable would reduce the rise by 0.4% of GDP in 2039/40, equivalent to a saving of around £400 per household.
It would save £74 billion by 2045/46 compared with the previous proposals.
Mr Gauke said: “As the Cridland Review makes clear, the increases in life expectancy are to be celebrated, and I want to make clear that even the timetable for the rise that I’m announcing today, future pensioners can still expect on average more than 22 years in receipt of the state pension.
“But increasing longevity also presents challenges to the Government.
“There is a balance to be struck between funding of the state pension in years to come whilst also ensuring fairness for future generations of taxpayers.”
The number of people over state pension age is expected to grow by a third between 2017 and 2042, from 12.4 million in 2017 to 16.9 million in 2042, according to the Department for Work and Pensions.
Under new plans, the pension age will increase to 68 between 2037 and 2039, earlier than the current legislation which sees a rise between 2044 and 2046.
The change will affect everyone born between April 6 1970 and April 5 1978.
Mr Gauke told MPs: “I want Britain to be the best country in the world in which to grow old, where everyone enjoys the dignity and security they deserve in retirement.
“At the same time we need to ensure that the costs of an ageing population are shared out fairly without placing an unfair tax burden on future generations.
“To deliver this we need to make responsible choice about the state pension age and that is exactly what the Government is doing today.”