Workers to wait longer for pensions
People now in their forties will have to wait until 68 to receive the state pension after it was revealed that the date of the planned increase in the retirement age is likely to be brought forward from 2046 to the mid-2030s.
And a further rise in the state pension age to 69 is expected to take place by the late 2040s, hitting people now in their early thirties, the Government has said.
The delayed retirement dates will help save around £400 billion from the national bill for pensions, on top of the more than £100 billion already banked from planned rises to 66 by 2020 and 67 by 2028, which are unchanged.
The Government said that future changes in the pension age will be based on the principle that workers should expect to spend about one-third of their adult lives, on average, in retirement.
Sources said the formula - which will be applied in a pension age review mechanism to be held every five years - should ensure that the country is able to offer "decent but affordable" pensions to people in their old age while maintaining "fairness across the generations".
"As a result of today's announcement, people in different generations can expect to spend broadly the same proportion of their lives contributing to, and receiving, the state pension," said a Government source in a statement.
The formula will be applied for the first time in a review shortly after the 2015 general election to fix the dates of the increases to 68 and 69.
Over the last 100 years, average life expectancy at 65 has almost doubled, rising by just over 10 years for both men and women.
In 1952 a man reaching state pension age spent around 21% of his adult life in receipt of state pension. This had risen to roughly 24% by 1980, 30% by 2000 and 32% by 2010. The principle announced today is intended to maintain that ratio at around a third.