The government’s Budget announcement to speed up plans to raise the state pension age for men to 66 by as early as 2016 is a positive move, according to a spokesman for pension and investment adviser Scottish Widows.

Ian Naismith, head of pensions market development for Scottish Widows, says: “Raising the state pension age will give added encouragement to plan for a longer working life. This has also been reinforced by the announcement that the default retirement age [DRA] of 65 will be scrapped, which is a clear message that the government is acknowledging that everyone should be able to work for as long as they are able.

“Although this gives employees the freedom to choose when to retire, employers may need to consider late retirement provisions under pension schemes, with more staff likely to work beyond scheme normal retirement ages.”

However, Dr Adam Marshall, director of policy at the British Chambers of Commerce, says the Budget announcements are sending out mixed messages: “It is strange that the government has pledged to reduce the burden of employment law, while at the same time proposing to restrict businesses’ ability to manage their workforce by abolishing the DRA.

“Business agrees that the DRA is currently too low — and needs to rise for both deficit reduction and fairness reasons. But if ministers want to make a positive change, they should either raise the DRA in line with the state pension age or offer employers a new dismissal route that helps business manage their workforce regardless of age.”