Lincolnshire residents have been warned that pension age could be increased under Labour
A finance expert has warned that the Labour Party might raise the state pension age to 70 within the next ten years. Kevin Mountford, co-founder of Raisin UK, noted that it “wouldn’t be surprising” if proposals surfaced to increase the pension age to 69 or 70 years.
Residents in Lincolnshire are still shocked over the axe of the winter fuel payment which has affected more than ten million people. So, for those living in Lincolnshire including Skegness, Lincoln, Scunthorpe, Grimsby, and Boston, anything theat Labour do to make life harder for people does not surprise them.
This warning arises amid growing speculation about possible reforms to the pension system under a Labour government. Chancellor Rachel Reeves, in her Autumn Budget, promised to retain the triple lock on state pensions but introduced inheritance tax for pension pots for the first time.
Pension age could increase to 70 under Keir Starmer
While experts suggest that increasing the state pension age could save the government money, it might negatively impact the incomes of older Britons if the age threshold is raised sooner than anticipated.
Mountford stated, “Given current trends and pressures, it wouldn’t be surprising if proposals emerged to increase the pension age to 69 or 70 years over the next decade, particularly if life expectancy projections stabilise,” during a conversation with the Express.
He pointed out that such changes could profoundly affect pensioners already dealing with financial difficulties. The current state pension age is 66 for both men and women.
Under existing legislation, this will increase to 67 between 2026 and 2028, with a further rise to 68 scheduled between 2044 and 2046. However, Mountford warned that Labour might hasten these planned increases.
“While the planned rise to 67 years by 2028 is already underway, speculation is rife about the Labour government potentially accelerating a further increase to age 68 – or even higher,” he declared.
These changes could boost government revenue by £6 billion annually, but Mountford stressed that increasing the state pension age would particularly affect vulnerable pensioners.
“For many, especially those in lower-income or physically demanding jobs, delaying the state pension could result in significant financial and health challenges,” he warned.
Mountford highlighted the necessity for careful planning if such changes were implemented. “If Labour does decide to push the pension age beyond 67, it’s essential to have a well-thought-out transition plan, such as enhanced support for individuals nearing retirement who are already struggling financially,” he said.
He cautioned against prioritizing short-term financial gains over long-term societal equality. “The short-term fiscal benefits must not come at the cost of long-term societal inequality,” Mountford added.
Many pensioners are still adjusting to recent changes, including alterations to the winter fuel allowance. Research by the Institute of Fiscal Studies (IFS) has revealed troubling poverty rates among those nearing state pension age.
The data indicates that poverty rates are higher among people aged 63-65 than in any other adult age group. Approximately 26 percent of those just below the state pension age experience poverty, compared to 21 percent among those in their early 40s.
However, the IFS notes that this may not fully represent living standards. The rate of material deprivation, which measures whether households can afford basic goods and services, is actually lower for the 63-65 age group at 16 percent.
This compares to 19 percent among the rest of the working-age population. The IFS acknowledges that raising the pension age helps manage public finance pressures from increased longevity, but warns it reduces the average incomes of those affected, especially impacting people who have already left paid work before reaching the state pension age. The report also identifies groups particularly at risk of falling below the poverty line.
These include pensioners and people reaching retirement age who are privately renting. The report suggests potential supportive measures for those affected by pension age changes.
One option would provide extra support to those one year below the state pension age and on universal credit, costing £600 million annually and reducing poverty in around 30,000 households.
Alternatively, increasing support solely for those receiving both universal credit and health-related benefits would cost £200 million yearly, helping to reduce poverty in 3,000 households.
