The state pension age is 66 but rising to 67, with the DWP payments paid out at two rates
All UK households told ‘prepare’ for world where DWP state pension doesn’t exist
UK households have been urged to “prepare for a world” where the state pension “doesn’t exist”. As it stands, the state pension is paid out by the Department for Work and Pensions (DWP) for in and around 13 million retirees.
The state pension age is 66 but rising to 67, with the DWP payments paid out at two rates: the Basic state pension, for people born before 1953 (if they’re women) or 1951 (if men), and the New, which was introduced in 2016.
But Lord Mackinlay has written in the Telegraph newspaper this weekend, suggesting the state pension may not be long for this world.
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Lord Mackinlay told the paper: “Young people need to prepare for a world where the state pension doesn’t exist.
“Our welfare system is straining under the weight of a population it was never designed to support.”
Chartered accountant and tax adviser Lord Mackinlay of Richborough was previously MP for South Thanet and served on the DWP and Public Accounts Select Committees.
He explained: “The number of retirees is forecast to grow significantly in the UK, increasing to 14 per cent of the population by 2032, equal to 13.7 million, with a reduction in the number of children.”
He went on: “Income tax receipts of £331bn are now outweighed by welfare spending of £333bn.
“The situation worsens in the new fiscal year as billions more is paid out on the reversal of the two-child benefit cap and usual inflationary uprating.”
The warning comes as the Triple Lock hike increases everybody’s new state pension rate by £575 a year – after the Labour Party pledged to honour the metric, which was first introduced by the Conservative Party government.
The Tories and Liberal Democrats coalition government created the Triple Lock back in 2010, before it kicked in a year later. But it is coming at a cost.
The former MP said: “With the state pension age starting another period of extension from 66 to 67 from this month, younger workers should be wondering if a state pension will be possible upon their retirement decades hence.”