Chancellor may raise retirement age to 70

Young workers in their early 20s may face having to work until they are 70 if the Chancellor announces a higher retirement age in his Autumn Statement today. Some experts believe that to help balance demands on the Government's future welfare budget the state pension age will go up to 70.The move is likely be one of a raft of changes previewed or announced today by Chancellor George Osborne who will deliver his Autumn Statement to the Commons from 11.15 am.Previously, the government had said that the retirement age would rise to 68 from 2046 but it now looks possible that may be brought forward to the mid-2030s.The retirement age could then rise again to 69 or 70 by the late 2040s. Chancellor George Osborne is expected to announce details later.Tom McPhail, head of pensions research for Hargreaves Lansdown, said: "It looks as if the Government will reveal plans for the State Pension Age (SPA) to rise to 70 for today's 20-somethings and an earlier rise to 68 for today's 40-somethings."This was always going to happen, it was just a question of how and when it was unveiled. There are provisions in the pensions bill for the SPA to be linked to life expectancy. Currently, the SPA will rise to 67 by 2028 but will then pause before rising to 68 between 2044 and 2046. This was already widely acknowledged as being too late and too slow."{desktop}{/desktop}{mobile}{/mobile}Other potential changes which may affect financial and tax planning could include:• Plans for a new a new pensions formula which will tie the state pension age to lifeexpectancy.• the possibility of making increasingly popular peer-to-peer lending eligible for Isa investment to encourage this type of lending• increases in business rates may be capped to 2% next year to keep costs for business downSome experts have predicted that Mr Osborne may introduce a lifetime Isa allowance although this is by no means certain. Others have called for Isa investment to be increased radically.David Harrison, managing partner at financial services firm True Potential, said:"The Chancellor must radically extend the stocks and shares ISA allowance to £25,000 per year to encourage people to save in a way that adds value. More investors would also help to fuel growth.""Extra support for savers could be funded by taxing borrowing on private, but not owner-occupied, property."It is also looks likely that GDP forecasts for this year and next will be raised to reflect the strengthening UK recovery.The Financial Times reports today that the Chancellor will proclaim a Budget surplus is in sight for the first time since 2000. This may pave the way for tax cuts in the next Budget.Personal income tax allowances are also set to be raised above £10,000 per annum.To pay for all these changes it is likely, however, that further cuts will be announced to government departmental budgets. HMRC is not expected to be affected by any changes.• Our sister site Financial Planner Online will be covering the Autumn Statement in detail from 11.15 am today, looking at what it means for Financial Planners, Paraplanners and wealth managers. Join us for comprehensive coverage and reaction. Also Follow @fpm_online for live Tweets on the key changes as they happen.

Chancellor may raise retirement age to 70

Related items