In his speech at the Conservative Party Conference in Manchester today, shadow chancellor George Osborne will outline plans to raise men's pensionable age to 66 from 2016 at the earliest, should the Tories come to power at the next election.
The bold plans do not talk about a rise in pensionable age for women but, according to the BBC, the Conservatives have not ruled out raising the age for women by 2016. Either way they hope to raise the official pension age to 66 between 2024 and 2026.
Commenting on the news, John Jory, deputy chief executive at pensions firm B&CE, said: "To resolve some of these pensions issues will require some radical thinking. While bringing the retirement age up by a year will be unpleasant for the people involved, we do have to be realistic and recognise that people are living longer. And if people want to fund a reasonable standard of living in retirement they have to accept that working for longer is one of the options that have to be considered.
"We try to encourage people to save more for their retirement. People either need to save more or work for longer, or a combination of the two. Unfortunately, as unpalatable as it is, we do have to consider radical ideas to resolve the pensions problem.
"However with regard to our own members - men working in the construction industry - their average retirement age is 62 to 63 because their bodies are incapable of working beyond this age. Therefore for people like these, working for longer is not an option unless we make a considerable investment in the causes of their early retirement in areas such as occupational health."
AndOwen Warnock, partner at international law firm Eversheds, added: "If a Conservative government is elected and brings this measure into force, clearly the default retirement age, at which employers can force employees to retire, will have to be increased to at least the new minimum age for state pension. The Conservatives are proposing this new state pension age of 66 will be introduced in 2016, but we can be pretty sure that the default retirement age will be raised much sooner than that - from 65 to at least 68, and more likely 70.
"This is for two reasons; first the current Government has announced a review of the default retirement age and signalled quite clearly that an increase is on the cards. Secondly, the High Court indicated 10 days ago in its judgment in the Heyday case that the age of 65 would not be "justified" under European law for much longer. In fact it is quite possible that, rather than raising the default retirement age, compulsory retirement will be banned altogether."
