On a long drive yesterday, I had the pleasure (?) of hearing in full George Osborne’s Autumn Statement, the response from Ed Balls, and then a little later (and more significantly), the statement from The Office of Budget Responsibility (OBR).

The OBR was perhaps the most compelling, as unlike the first two, they are independent in their assessments of the economy. But the fact remained that all three statements were really, really, grim. Clearly the next few years are going to be extremely challenging for employers and employees.

Whilst it wasn’t covered yesterday, the delay in auto-enrolment will at least ease some of the burdens on smaller employers during this period, and in light of the OBR statement, it’s really evident why such action was needed. Indeed, if the Euro-Zone crisis does deepen (which the OBR admitted was perhaps more likely than not), then its possible that a wider delay to auto-enrolment requirements may yet apply. Whilst I don’t expect this to be the case given the proximity of the implementation timetable, it’s certainly worth being aware of.

Incidentally, and importantly, I am most certainly not suggesting that employers should delay planning (because good planning will ease the costs and burdens of auto-enrolment for all employers). The Pensions Bill is now The Pensions Act 2011, and as such employers and the industry should expect the implementation to continue unless really extreme circumstances apply.

So, having got that out of the way, onto the subject of my post, which you may recall was the increase to the State Pension Age (SPA) to 67 (between April 2026 and April 2028). This is a significant speeding up of the move to a higher SPA, and worthy of note. The change is driven largely by the increase in life expectancy, which obviously means that pensions will be (on average) paid for longer, and therefore cost more.

But I would just like to highlight that this is only the SPA, the point when state pensions will start to be paid. It is no longer aligned to a Default Retirement Age (DRA), which you will recall was scrapped recently.

What this does suggest though is that perhaps company supported pension schemes and employee benefits should all be increasing to the new SPA (many are currently set to the old SPA of 65), and this is something we are likely to see a response to from the industry over the next few months I guess.

Worth being aware of next time you consider your benefits structure though.

Best regards

Steve