Osborne's plan to raise retirement age
Updated on 06 October 2009
Men and women both face a state retirement age of 66 by 2020 under plans spelt out by the shadow chancellor George Osborne in his speech to the Conservative party conference in Manchester.
The Conservatives were forced to rush out a clarification after confusion arose when they leaked their plans to raise the male retirement age from 2016, but did not say how their policy would affect women.
Osborne told the Conservative party conference the pension delay originally planned for 2026 could come into effect in 2016.
The Tories say their plan would cut Government borrowing by £13bn a year.
Osborne also announced that a Conservative government would impose a one-year pay freeze on the majority of public sector workers as part of a package to get the state deficit under control.
The Tory proposal goes beyond Chancellor Alistair Darling's call for a salary freeze for the 750,000 highest-paid public servants.
Under Osborne's plans, only the one million earning less than £18,000 would get a rise, with military personnel on active service overseas being compensated by doubling their operational allowance to £4,800.
Dicussing the pension plans, Conservative leader David Cameron said: "Next year, we are forecast to be borrowing 14 per cent of our national income. That's twice as much as when Denis Healey virtually went bust in the 1970s, which is very serious.
"It is a difficult decision to make, but it has to be done, to raise the state pension age to 66 in the future to save money for the future.
"If we are going to have a proper comprehensive approach, we have got to look at pay, you've got to look at pensions, you've got to look at benefits."
Meanwhile, Chancellor Alistair Darling has announced the top earners in the public sector will have their salaries frozen next year.
Judges, senior NHS managers and GPs are among the 750,000 people who will be affected.
Mr Darling has written to the chairs of the salary review bodies telling them he wants to renegotiate existing pay deals because of the state of public finances.
The only sector that will not have pay frozen will be the armed forces.
Senior civil servants are entering the final year of a three-year pay deal in 2010, but Mr Darling wants the agreement torn up.
Three-year pay deals for non-senior civil servants will be respected, but those without agreements face rises in line with the private sector between 0 per cent and 1 per cent.
Chief Secretary to the Treasury Liam Byrne said: "Britain's public services are invaluable, but if we are to halve the deficit over four years and protect frontline services we have to make tough but realistic decisions on pay.
"That means leadership from senior groups and realistic increases for other workforces."
Conservative leader David Cameron insists Mr Darling's plan does not go far enough.
He said: "I think it is slightly cynical in its timing, it is rather insubstantial in its content and it is not part of an overall approach."
On Thursday the Channel 4 News website will be providing extended live coverage of David Cameron's speech to the Conservative conference, including film extracts, expert analysis and Twitter commentary.
To watch and contribute, go to www.channel4.com/news from midday on 8 October.
