Financial News

  • 5 December 2013, 11:16

Autumn Statement: Longer Wait For Pensions

People will have to work until they are 68 years old before receiving a state pension from the mid 2030s, in a move that will raise around 400bn for the Treasury.

Chancellor George Osborne will also announce the age will rise to 69 in the 2040s in his Autumn Statement.

The changes will affect people currently aged 49 or younger.

A Government source said: "This is part of the Government's long-term plan to secure a responsible recovery.

"It is a difficult decision to make sure there is a fair deal across future generations and that the country can live within its means.

"It will help make sure the country can offer people decent pensions in their old age in a way that with increasing life expectancy the country can also afford."

Currently the state pension age is due to rise to 68 from 2046 and to 69 in the late 2040s.

The news - released by the Treasury ahead of the Autumn Statement - is intended to show the Government is determined to keep making tough decisions to drive down the deficit despite improving economic figures.

Most government departments also face a 1% cut in their budgets for the next three years, which will save 1bn a year.

Health, schools, international aid, local government, HMRC and the security services will be exempt because their budgets are protected.

In an interview with Sky News, Prime Minister David Cameron said: "The truth is you're not really delivering a higher level of standards and actions on the cost of living unless you secure a long-term growth and success of the British economy.

"From that everything else will follow.

"But should we at the same time try to help families with their budgets? Yes of course we should."

The Autumn Statement's good news is likely to be focused around the cost of living, to counter Ed Miliband's pledge to freeze energy bills for 20 months.

Labour argues most people are not benefiting from the improving economy because of rising prices and stagnating wages.

The Chancellor will also announce a 50 cut in the average energy bill and free school meals for every child under seven years old.

Firms will see a business rates capped at 2%, while the Chief Secretary to the Treasury Danny Alexander has confirmed 375bn of planned public and private investment in infrastructure.

For the first time since becoming Chancellor, Mr Osborne is expected to announce more positive economic figures to show growth is returning.

:: Watch live coverage of the Autumn Statement throughout Thursday on Sky News on Sky 501, Virgin Media 602, Freesat 202, Freeview 82, Skynews.com and Sky News for iPad.

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