Shadow chancellor outlines pension age hike

Shadow chancellor George Osborne announces plans to raise retirement age to 66 by 2016

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Tuesday, 06, Oct 2009 01:13

By Matthew Champion.

Workers in a Conservative government would have to wait until the age of 66 to start receiving a state pension under dramatic plans outlined at the party's conference today.

Shadow chancellor George Osborne said he would raise the retirement age within seven years, far outstripping the current Labour plan of phasing in such a rise by 2026.

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The plans would see 2.5 million people aged between 48 and 57 work a year longer, with the Tories claiming an annual saving of £13 billion as a result.

Mr Osborne's proposals would see the retirement age for women, currently at 60, rise to 63.

Under current government plans the retirement age for women is to rise incrementally to 65 by 2020. The Tories are committed to aligning male and female retirement ages, but today's announcement will initially only affect men.

Ministers have already accepted the need to raising the state pension age, but at a much slow rate; rising to 68 by 2046.

Mr Osborne said his plans represented "one of those tradeoffs any honest government has to confront".

"No one who is a pensioner today, or approaching retirement soon, will be affected. But this is how we can afford increasing the basic state pension for all," he said.

The news comes as the government announces a pay freeze or directly imposed one per cent pay rise next year for 750,000 public sector workers.

The most senior public sector workers, including judges, GPs, quango chiefs, and NHS managers, are among those set to receive no pay rise at all.

Chancellor Alistair Darling has been criticised by Tory party sources for positioning his major announcement against Mr Osborne's in Manchester.