The state pension age is set to rise seven years earlier than expected, forcing millions of Britons to work for years longer.
The retirement age is set to gradually rise to 68 between April 2044 and April 2046, affecting those born between April 1977 and April 1978.
But Treasury officials have now told the Office for Budget Responsibility (OBR), the Government’s fiscal forecaster that the “current policy” is to bring the rise forward by at least seven years.
Around five million people now aged between 49 and 55 would be made to work an additional year before being eligible for their state pension, costing them about £12,500.
Ministers launched a review of the state pension age last year.
Led by the Government Actuary’s Department and Suzy Morrissey, the deputy director of the Pension Policy Institute, the review will make recommendations on when the pension age should rise – before any change is made by Labour.
The decision would save the Treasury an estimated £6billion a year from 2037 compared to the current timetable.
In a response to the OBR, the Treasury said it intended to bring forward the pension age towards the end of the next decade.
The OBR said: “We assume that the state pension rises to 68 in 2037-39. The Treasury has confirmed to us that this is the government’s current policy position, rather than the legislated increase set in the Pensions Act 2007.”
This would cost the Treasury an “average additional £6billion in today’s terms in each of the years the state pension age rise is delayed,” the OBR said.
The Treasury said the plan to bring forward the rise dates back to 2017, when Theresa May’s Government accepted the findings of a review by John Cridland, a former director of the Confederation of British Industry.
Pensions Minister Torsten Bell previously said the Government had not made a decision on the state pension.
“We want to make sure that we have a sustainable state pension for the longer term,” he said.
Those checking their pension eligibility on the Government’s website will see their retirement age calculated based on existing laws.
Sir Steve Webb, a former Pensions Minister, said the Government was likely to confirm the changes after the pension review concludes.
He told The Times: “Anyone checking the Government’s pension calculator would assume that the pension age won’t be rising to 68 before the mid-2040s.
“But within Government it is widely expected that the age increase will take place seven years earlier than the law currently says.
“That means around five million people will lose around £12,500 that they might otherwise have been entitled to. Ministers are going to have to be clear about this soon. If they want to increase the pension age in 2037 they are to have to legislate on this next year.”
Sir Steve said decisions around the state pension age would prove an “early test” for Andy Burnham as Prime Minister and indicative of the “tough decisions” he may have to make.
Paul Johnson, a former head of the Institute for Fiscal Studies, said if the Government plans to bring forward the state pension age, it should “get on with legislation – and fast”, warning that people needed at least a decade’s notice.
“For many decades the retirement age has not kept pace with increasing life expectancy and these reasonably modest changes to the pension age will help the Government’s long-term fiscal position,” he added.
“However, the Government will also have to look at other areas like the triple lock to ensure that state pension is sustainable in the longer term.”
The Treasury told The Times the decision to bring the pension age forward was not “new information”.
A Treasury spokesman said: “The previous Government publicly committed to raising the state pension age to 68 between 2037 and 2039 and the OBR has reflected that position for years.
“The state pension age review, which will consider what the timetable for state pension age should be in the coming decades, is currently under way and we cannot pre-empt the outcome.”
