The Government stated in early July that it has no plans on increasing the State pension age beyond 66, and further details have since been reported of a radical shake-up of the pension systems, which was agreed in principle by the Government last week.

It is understood that Minister for Social Protection Heather Humphreys brought the proposal to a Cabinet sub-committee meeting recently.

The plan detailed what was termed a “flexible pension age” which would enable people to receive the State pension at 66, but also to “build up” a higher payment if they continue working beyond this age, until the age of 70.

Workers will also be able to defer their pension until the age of 70 after a broad agreement was reached among the Government parties on the issue.

Those who work beyond the age of 66 will receive a higher pension rate when they opt to retire. This is based on the fact that they will have paid more PRSI and will be in receipt of their pension over a shorter period.

This policy agreement in Government is likely to result in higher PRSI rates generally over time.

The final details of the proposal are still being worked on and plans are set to be finalised by the Government in the Autumn.