State pension age update as Rachel Reeves mulls ‘rabbit in the hat’ move

The next stop on Rachel Reeves’ cost-cutting spree could see the age and guarantee put under fresh scrutiny. Despite huge backlash to the Government’s move to scrap winter fuel payments for thousands of pensioners across the UK last year, retiree Brits could be in for more challenges to come as the Treasury hunts for ways to ease pressure on the public purse. The Chancellor’s spring statement – due on March 26 – is unlikely to include any changes to the pension system, Steven Cameron, Pensions Director at Aegon, said, but that doesn’t necessarily mean the cohort has dodged further changes to either age or the , the latter of which accounts for around £11 billion in public spending each year.

If budgetary pressures are “worse than anticipated”, “we can’t rule out a ‘rabbit in the hat’ review of the ” in the months to come, Mr Cameron warned in IFA Magazine. “There’s already an ongoing review of the age and government finances, which may mean it needs to increase further or faster,” he added. “We also can’t ignore the ‘’ which has proven costly and unpredictable in recent years. While the Government has currently committed to keeping it, the formula might be adapted.”

The pensions director said Ms Reeves’ Spring Statement is “likely to ‘pass on pensions'” but cautioned that the Government “has many radical plans for pensions which we’ll hear more of in the coming months”.

It comes after pensions minister Torsten Bell refused to rule out making changes to the , suggesting that a review of government finances should be “as broad as possible”.

“The economy has not been growing well for some time, that’s affecting people’s wages all over the country, and hospitals are not working and there are potholes on the roads,” he said at the Pensions and Lifetime Savings Association conference in Edinburgh last week.

“Our job is to take sometimes difficult decisions to make sure we can start doing the basics again, an economy that grows, wages that rise, public services that function.”

The Chancellor pledged in October to maintain the for the rest of this Parliament, but Mr Cameron said that she could use the Spring Statement to “set the ‘mood music’ for the future direction of travel on tax and spending policy”, depending on Office for Budget Responsibility (OBR) forecasts and “other budgetary pressures”.

It comes amid speculation over whether the Government will row back on controversial plans to overhaul the country’s benefits system in a bid to cut “unsustainable” costs after opposition on the backbenches.

Health Secretary Wes Streeting told the on Sunday: “What I do know is the Work and Pensions Secretary [Liz Kendall] wants to support people who need help the most, and we’ve got to make sure that there is a wide range of support and that everyone’s playing their part.”