Tories Aim To Speed-Up Pension Age Rise

(Reuters) – THE CONSERVATIVES aim to speed up planned rises in the state retirement age if elected to ease pressure on government finances, shadow chancellor George Osborne will say today.

The Conservatives, who are well ahead of the Labour party in opinion polls, are fleshing out how they might govern Britain before an election that must be called by June 2010.

Whichever party wins will face record government borrowing — set to hit £175 billion, or more than 12% of gross domestic product — this year, putting government spending plans at the heart of the election battle.

‘Our aim is to bring forward the date when the pension age rises,’ Osborne will tell his annual party conference in Manchester, according to extracts of his speech.

‘We will ensure that no increase will happen until the second half of the next decade — in the parliament after next. 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 Conservatives have said they want to restore a link between state pensions and earnings.

The pension age for women is due to rise to 65 from 60 between 2010 and 2020 to bring it in line with men. The unified pension age will then be increased to 68 by 2046, starting with an increase to 66 by 2026.

‘Most experts… now think that is too far off,’ Osborne will say, according to the speech extracts, promising a pensions review if elected.

An increase in the state pension age of 18 months could reduce government borrowing by about 20 billion pounds a year, the Conservatives said, quoting studies by the National Institute of Economic and Social Research.

On Monday, the Conservatives also outlined plans to overhaul the welfare system with measures aimed at helping those claiming sickness benefits get back to work and getting young, unemployed people into work placement schemes sooner.

The party also announced tax breaks for new companies.

As part of its own plans to cut the deficit in half in four years, the Labour government said it would push for its toughest public sector pay deal for decades by seeking a pay freeze or small rise for the 750,000 best paid staff on the state payroll.

The government will also recommend to pay review bodies there should be no salary increase in the next financial year for senior groups such as judges, top health service managers and family doctors.

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