The UK Government could shelve a rise in the state pension age, as a decline in life expectancy leaves ministers struggling to justify the change.
Jeremy Hunt is preparing to delay a decision on when to increase the state pension age to 68, the Telegraph understands.
The state pension age is currently 66, and will rise to 67 between 2026 and 2028.
It is scheduled to increase again to 68 by the mid-2040s, but the chancellor had been hoping to bring this forward, as recommended by an independent review in 2017. This would save the government up to £10billion annually.
However, Whitehall insiders said there was an emerging consensus among key cabinet ministers that the decision should be postponed until after the next General Election.
Pushing a decision to the other side of the election, which is widely expected in 2024, could have political benefits for the Tories as they seek to overturn a major poll deficit.
Core bloc
Older workers in their 50s are a core bloc of traditional Conservative voters that the party cannot afford to alienate.
Bringing forward changes in the state pension age risks frustrating this group, given that changes are likely to impact their near future.
Steve Webb, a former pensions minister, said: “In many ways, people in their 50s are probably your swing voters.
“Upsetting people in their 50s is probably not what you want to do just 18 months before an election.
“George Osborne ( an ex-chancellor) once said that it is relatively easy to raise money by raising the pension age as long as it’s far enough away. But I think people are much more aware than they were.”
In the last decade, John Cridland advised the Government to raise the state retirement age to 68 between 2037 and 2039. He suggested increases should be linked to rising life expectancy, helping to justify the rise.
Life expectancy drop
However, since then, British life expectancy has unexpectedly dropped. It was lower in 2021 than in 2011, according to the Office for Health Improvement and Disparities.
This has undermined the government’s logic for pushing out the retirement age and left the chancellor struggling to justify the political cost of the policy.
Baroness Neville-Rolfe has submitted a new independent review of the state pension age and the government has a May deadline to publish and respond to her recommendations.
The Conservatives have long promised to give the public 10 years notice before the age rise comes into effect, after David Cameron faced a backlash as Prime Minister to the way he handled changes to the retirement age.