Scrap pensions 'triple lock', says Cridland report

The state pension age should be pushed back a year to 68 to cut the UK’s £100bn a year pension costs, according to the independent review by John Cridland, which was commissioned by the government.

In his final report, Mr Cridland recommended raising the state pension age to 68 between 2037 and 2039  - seven years earlier than currently planned.

The repor also recommends that the triple lock, which raises the state pension by whichever is the highest of average earnings, prices, or 2.5 per cent — be scrapped and replaced with a link to earnings.

Cridland has also rejected calls for early access to the state pension for people in poor health, although added that means-tested support should be made available a year before state pension age for those who cannot work for longer. 

The Cridland report coincided with an independent Government Actuary’s Department report, which pointed to a possible state pension age of 70 for anyone currently aged 30 or under.

The industry's response has been varied, with Steven Cameron, Pensions Director at Aegon saying:

“We’re disappointed that the Cridland Review has rejected calls to extend the flexibilities people already enjoy with private pensions to state pensions. Requiring everyone to wait till an ever increasing age to draw a state pension is inflexible and increasingly outdated compared to today’s more flexible and personalised transition into retirement. This is a missed opportunity to meet the needs of those who through health concerns, job pressures or lack of employment opportunity simply can’t keep working into their late 60s. We call on the Government to keep the door open to future change.”

David Sinclair, Director, International Longevity Centre-UK, said the report might come as a shock for younger people, but that we must be prepared for later retirements as life expectancy increases, adding:

"If Government chooses to act on Cridland’s recommendations to further increase State Pension Age, we are going to need serious attention from policymakers and employers to ensure that we are able to work longer."

John Cridland, former director-general of the Confederation of British Industry and the author of the independent report, said the aim was to “smooth the transition for tomorrow’s pensioners, and to try and make the future both fair and sustainable”.