Yahoo Finance State pension age increase will cost 7.6m people in their 30s and 40s £10,000 each
More than 7.5 million people currently in their 30s and 40s will lose out on thousands of pounds under plans to raise the state pension age earlier than planned.
People born between 1970 and 1978 will have to wait until they turn 68 to claim their pension – and that extra year will cost them almost £10,000, new figures show.
Labour said the reforms were “disgraceful and unjustified” and accused the government of making workers carry on for longer to pay for their failing austerity policies.
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Analysis by the House of Commons Library found the £74 billion the move will save works out to £9,800 per person on average across the 7.6 million hit by the change.
The amount is approximately equivalent to around one year’s worth of payments of the new state pension, which totals £8,300, the research said.
The government last week announced the raising of the state pension age to 68 was being brought forward by seven years – coming into force between 2037 and 2039 – to reflect increasing longevity.
Debbie Abrahams, shadow work and pensions secretary, said: “This is a disgraceful and unjustified attack on the state pension by this government, who are asking millions of people to work longer to pay for their failing austerity plans.
“The latest research on life expectancy, published days ago, shows that there is no evidential basis for bringing the state pension age further forward.”
Labour, she said, would leave the state pension age at 66 while a full review of life expectancy and health was carried out.
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David Gauke, the work and pensions secretary, told MPs last week that implementing the proposals would create “fairness across the generations, and the certainty which people need to plan for old age”.
He said failing to act “would be irresponsible and place an extremely unfair burden on younger generations”.
The change follows a review by the former CBI director general John Cridland, which concluded the costs of paying Britain’s ageing society a state pension could become unsustainable unless the age at which payments started was upped.
Under current plans, the state pension age for men and women will be equalised at 65 at the end of 2018, before rising to 66 in 2020 and 67 in 2028.
The new change affects anyone born between April 6 1970 and April 5 1978.
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The Department for Work and Pensions (DWP) said it would save the equivalent of £400 a year per household.
A DWP spokesman said: “These changes will ensure that the state pension is both fair and sustainable for future generations.
“Those affected will on average still receive the state pension for longer than the generations before them.
“Under the simplified new state pension at its basic level, people in retirement will receive over £1,250 a year more than compared to April 2010.”
