MILLIONS of people will have to work until 70 before they receive their state pension, under estimates to be unveiled by George Osborne today.

The Chancellor will use his Autumn Statement to warn the state pension age is set to rise to 68 by the mid-2030s and to 70 at around 2060.

Ministers say the moves are necessary to ensure the system is affordable in the long term and that workers spend an average of one-third of their life in retirement. The Coalition Government has already announced the state pension age will rise to 66 by 2020 and to 67 by 2028.

Under current estimates, those dates will not change, but a rise to 68 could be brought forward from its current date of 2046 to the mid 2030s, rising to 70 approximately 25 years later. The exact dates will not be set until after the next general election in 2015.

Under reforms announced earlier this year a new review mechanism, informed by up-to-date life expectancy figures, will make changes to the state pension age. Treasury sources said any change would hit people in their 40s and younger, with those over 50 still able to claim their state pension at 68.

The Coalition insists that the moves, expected to save around £400 billion, are needed because people are living longer and healthier lives. In 1952, men spent an average of around 21% of their adult life in receipt of a state pension, by 2010 that had risen to 32%.

Mr Osborne is also expected to announce a general principle to maintain the average amount of time a worker spends in retirement at around one-third of their life.

A Coalition source said the pension change was a difficult decision to "secure a responsible recovery". He added: "[The change] will help make sure the country can offer people decent pensions in their old age in a way that with increasing life expectancy the country can also afford."

Mr Osborne has also written to the Cabinet to inform ministers of another £3bn of cuts between now and 2016.

Scotland will be shielded in part from the effects, with Whitehall departments hardest hit. Aid, local government and the security services as well as health and schools will all be exempt.

The Ministry of Defence will also be given exceptional flexibility to keep an expected £800 million underspend and roll it over to next year.

Mr Osborne is also expected to announce plans to raid his reserve budget to the tune of another £1bn.

He will also set out plans for a "hassle free" system that will spell the end of the tax disc from October 1, 2014, with motorists able to pay their Vehicle Excise Duty monthly via direct debit.

The move is expected to save business a total of £7m a year in administration costs alone.

Ministers have already announced plans to roll back so-called green taxes, which it is estimated will save £50 fron the average household fuel bill. Yesterday the Coalition set out plans to focus renewables subsidies away from onshore wind and into offshore wind farms.

Mr Osborne is also expected to set out plans for a tax break for married couples, though David Cameron has rejected calls from within his own party for a cut in taxes for the middle classes.

Also anticipated is action on business rates.

Scottish Finance Secretary John Swinney called for clarity over plans for the Barnett formula, saying: "The Autumn Statement is a chance for the Chancellor to chart a proper course for a sustained economic recovery - but he also needs to come clean about his future plans for Scotland's finances.