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State pension age to rise to 66 by 2020

The state pension age will now rise to 66 by 2020 for both men and women, six years ahead of the plan put in place by the previous Labour government.

In the Comprehensive Spending Review, Chancellor George Osborne announced that the retirement ages of men and women would be equalised at 65 by November 2018, with both ages rising to 66 by 2020.

In 2007, the Labour government followed the recommendations of Lord Turner's Pensions Commission and decided that the state pension age should rise: to 66 by 2026, to 67 by 2036 and to 68 by 2046.

The Coalition has brought forward the plan on the grounds that people are living longer and state pension costs have become unsustainable at current levels. The timescale for raising the pension age to 67 and 68 is now also likely to be accelerated.

Meanwhile, public sector workers are set to have to pay higher contributions to their own pension schemes, following the recent initial recommendations of Lord Hutton's independent commission.

Although no detailed decision will be taken until Lord Hutton's full report is delivered next spring, Mr Osborne said he expected changes to save the government £1.8bn a year by 2014-15.