Minister may raise pension age to 70

Britain is being pushed back to ‘the days of Dickens’ by plans to force workers to retire as late as 70, it was claimed last night. 

Ministers warned that millions of workers face the prospect of a retirement date which slips farther from their grasp every year. 

Work till you drop: The pension age is set to rise and rise.

In a major shake-up of state pensions, the Government said the age at which people can get their pension could jump in line with rising life expectancy.

Yesterday it revealed a fast-track, six-week review into the state pension age, currently 60 for women and 65 for men.

Under its current proposals, the state pension age will rise to 66 ‘no sooner than’ 2016 for men and 2020 for women – nearly a decade earlier than Labour’s original proposals.

Labour had also proposed a rise to 67 between 2034 and 2036 and 68 between 2044 and 2046.

But Steve Webb, pensions minister and a LibDem MP, said he was considering ripping up these plans, and raising the state pension age even higher to reflect increasing life expectancy.

He insisted that any new formula would not just be a ‘crude’ link between the two, but warned that leaving the age unchanged is ’simply not an option’.

The proposals triggered a storm of protest last night, with unions and campaign groups warning that they would unfairly penalise manual workers and the poor whose life expectancy is lower.

Bob Crow, general secretary of the Rail Maritime and Transport union, said: ‘If you are a rich banker with a private pension, you can sail off on your yacht at 55. But, for working men and women, retirement will be pushed further and further over the horizon in a step back to the days of Dickens.’

Work and Pensions Secretary Iain Duncan Smith said big increases in life expectancy left the Government with no option but to raise the age at which a state pension can be claimed.

In 1926, when the first contributory pension was introduced, only 34% of men and 40% of women were expected to reach 65. Today, one in four baby boys should reach the age of 100.

Experts said today’s workers should accept that their retirements will be dramatically different from those enjoyed by their own parents.

Laith Khalaf, a pensions analyst at financial advisers Hargreaves Lansdown, said: ‘Today’s children could well be working into their seventies as the state pension adjusts to rises in life expectancy.

‘They will barely believe that their parents and grandparents retired at such a young age. Retiring in your sixties could become a thing of the past unless you build up a big enough pot of private savings while you are working.’

Dot Gibson of the National Pensioners’ Convention said the move would lead to the poorest being forced to ‘work until they drop’.

She said: ‘There can be no doubt that the wealthier you are, the longer you live, therefore raising the retirement age is a direct attack on the very poorest in our society.

‘This policy isn’t about choice. It is about cutting costs.’

It is estimated that the taxpayer will save around £13bn for each year that the state pension age is raised.

Ros Altmann, a former No 10 pensions adviser, said moves to increase the pension age in line with life expectancy were ‘inevitable’.

She predicted a ’social revolution’ with soaring numbers of older people working part-time.

John Cridland of the employers’ organisation the CBI, said: ‘We are in favour of raising the basic state pension age gradually over time, probably reaching 70 by 2030.’

˜ French workers caused widespread disruption yesterday over far more modest plans to raise the retirement age to 62.

Trains and flights were cancelled, schools were closed and newspaper production was halted as unions staged an angry response to measures described by President Nicolas Sarkozy as ‘unavoidable’.

Even under Mr Sarkozy’s plans, French pension rights would remain untouched until 2018, when the retirement age would rise from 60 to 62.

But many French people, long accustomed to generous social benefits, are determined to resist the reforms.It is not uncommon for 60-year-olds in France to retire on virtually the same income as when they were working. 

Source:  http://www.thisismoney.co.uk/pensions/article.html?in_article_id=507025&in_page_id=6

It’s time to take politics out of pensions

We can no longer trust politicians to take care of our pensions, say experts. Instead, they should hand control to an independent body…

Out with the old: Pensions and politics don't mix well, say experts

After years of political meddling, Britain’s once-proud pensions system lays in ruins.

Criticised for being over-complicated and unrewarding, pensions have been rejected by millions of Britons, despite huge swathes of us facing terrifying gaps in our retirement savings.

Fewer than 40% of the working-age population has any pension whatsoever, thanks in no small part to an overly complex system that’s constantly changing.

Now, as the coalition government battles to cut the UK’s bulging deficit, pensions face the threat of the Chancellor’s axe once again.

Already, we know the state retirement age is to rise with sharp and immediate effect, forcing millions of us to work into past our 70th birthday.

Meanwhile, public sector workers have braced themselves for dramatic cuts to their ‘unsustainable’ old age benefits.

And as if that wasn’t enough, the new Government has now knocked a potential £100bn off the value of private final salary pensions in its first ’stealth cut’.

How can we plan for the future if every new government changes the pensions goalposts? How can we be sure our pots won’t be unceremoniously raided in years to come?

We can’t. It’s as simple as that.

Experts fear that there may only be one way to make pensions good again: ban party politics altogether.

Giving power to an independent body, they say, could pave the way for the essential, sustainable reforms needed to stave off a nationwide retirement crisis. Finally, pensions could be made attractive again.

And after the emergency Budget left ‘the most important pensions questions answered’, the clamour to take politics out of pensions has intensified.

Former Treasury adviser, Ros Altmann, has called for a new non-political commission of the best pensions minds to work closely with new minister, Steve Webb, to overhaul the current system and introduce sustainable policies.

‘You’ll work till you drop’: Britons stop saving into pensions

Pensions are too important for politicians

Once properly reformed, overall responsibility for Britain’s pension system could then be permanently handed over to this independently-appointed body, ending the political toing-and-froing that has tainted the past 30 years.

Altmann said: ‘We need an independent body responsible for pensions. These issues are too important to allow party politics to stop decisions being taken for the good of the country.

‘If we had an independent body that’s set in and lasts, we could begin to get to grips with what has become a very serious crisis by making sure that pensions policy stays out of political meddling in future.’

Every week a new report shows the financial torture awaiting many of the Britons who will retire in the coming decades.

Nearly 20% of over 55s still have a mortgage, with an average loan of £50,000, described by insurer Aviva as ‘a significant debt burden’.

Furthermore, a quarter has less than £2,000 in savings, while only 13% have more than £100,000 to see them through old age.

It means millions of over-50s are on a ‘collision course with an impoverished retirement’, with almost eight in ten set to receive an annual income worth less than £8,000.

It smacks of an uncomfortable reality: a generation of Britons has lost touch with the ’savings culture’, disillusioned by constantly flip-flopping pension saving rules and a general lack of clarity when it comes to state benefits in old age.

Now just 14.5m Britons – fewer than 40% of the working-age population – have any sort of pension, according to the Department for Work and Pensions.

Source: http://www.thisismoney.co.uk/pensions/article.html?in_article_id=504342&in_page_id=6