Osborne ready to raise retirement age

By politics.co.uk staff

George Osborne has admitted he plans to raise the state retirement age to 66 in his speech to the Tory party faithful today.

The proposals would see the retirement age rise ten years earlier than planned, saving £13 billion a year from 2016.

Existing government plans would have seen the increase take place in 2026, before rising by a further year each decade. Women’s pension age would have risen to 61 next year and 62 in 2012.

The shadow chancellor framed the policy as an example of the Tory party making the tough, unpopular decisions required of mature government. A review would be set up to evaluate how the change could be made ten years earlier, and how it would rise in the future.

But Mr Osborne also pledged to link pensions to earnings, rather than prices.

He said: “No one who is a pensioner today, or approaching retirement soon, will be affected. But this is how we can afford increasing the basic state pension for all.”

The pronouncement comes as chancellor Alistair Darling called for a pay freeze for senior NHS managers, judges and top civil servants, with a zero to one per cent rise for senior public sector workers.

Mr Osborne wooed delegates yesterday with a pledge to get rid of national insurance for two years on the first ten employees hired by start-up firms.