The post-war ‘baby boom’ will swell pensioner numbers by over 800,000 people in 2012, 150,000 more than during 2011. As a result, government spending on pensioners is set to grow by £4bn between now and 2012.
The increase in pensioner numbers is a direct result of a post-war rise in the birth rate. Those born in 1946 share a birthday with Bill Clinton, Sylvester Stallone, and George Bush, while those born in 1947 are contemporaries of Alan Sugar, David Bowie and Steven Spielberg. The overall rise in numbers predicted for 2012 is around 22%. In Aberdeen it is expected to be 33%, in Hull 30% and in Kingston upon Thames 26%.
Pensions Minister, Steve Webb, remarked on the the future prospects for today’s pensioners: ‘People are now living longer, healthier lives and most 65-year-olds can expect to live until their late 80s. State Pensions need to reflect this and we need to make sure that the system is sustainable in the face of increasing longevity.’
State pension age review
The government is currently considering bringing forward a planned increase in the state pension age, from 65 to 66. It is expected to rise in 2016, although a final decision will not be announced until the autumn. Further increases are also expected to be advanced, with a pension age of 68 coming in from 2038, rather than 2046 as previously scheduled.
Retirement age to be abolished
Earlier this year, the government announced that it intended to abolish the default retirement age. This means that people will no longer automatically retire at 65 but will be able to continue working for longer if they wish to. If they put off claiming state pension, they can boost the amount they eventually receive.
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