Plans to bring forward increasing the retirement age to 68 are expected to be delayed by ministers.
Work and Pensions Secretary Mel Stride is to update MPs on a statutory review looking into whether the age at which someone can claim state pension – worth around £10,000 a year – should be increased.
i understands Mr Stride will confirm the Government intends to delay inducing any legislation to increase the pension age amid stagnating life expectancy.
The retirement age is currently due to rise gradually to 68 between 2044 and 2046 but the statutory review was tasked with considering proposals to bring that change to as early as 2037.
The decision is understood to have caused tensions between the Treasury and the Department for Work and Pensions (DWP), with the former keen to use decision to save public money in the medium term.
Chancellor Jeremy Hunt told MPs last week that “fiscal sustainability” would play a key role in the decision.
But there were concerns among some Tory MPs that doing so would be politically very controversial before the next election.
It would also have been hard to justify given life expectancy projections have fallen since the last state pension review was published, in 2017, which recommended the Government consider bringing the age increase forward.
While some of the fall in life expectancy is related to the impact of Covid-19 on the older population, DWP sources have argued the data simply does not back up raising the retirement age. Doing so, insiders say, would therefore be hard to justify.
The move would also have come off the back of the announcement of the Government’s controversial plan to announce tax breaks for wealthy pensioners by removing the cap on the lifetime allowance.
Paul Johnson, director of the Institute for Fiscal Studies (IFS), warned in The Times this week that bringing forward the age increase risks leaving millions of people on the brink of retirement in poverty.
Instead, it is understood that ministers will kick the decision into the long grass.
Independent state pension age reviews are legislated to take place every six years.
The 2017 review, led by John Cridland, recommended at least 10 years’ notice should be given of any increase in pension age in order to allow those affected to plan financially.
A DWP spokesperson said: “The Government is required by law to regularly review the state pension age and the next review will be published by 7 May.”