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. 

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

London commuters arrive in the City

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.’

AVERAGE RETIREMENT AGES IN EUROPE
Sourced by Eurostat from 2007 in a 2009 paper
Country Average retirement age State pension age
France 59.4 60
Greece 60 65 (m) 60 (w)
Italy 60.4 65 (m) 60 (w)
Germany 62 65
Spain 62.1 65
Portugal 62.6 65
UK 62.6 65 (m) 60 (w)
Netherlands 63.9 65
Ireland 64.1 66
Norway 64.4 62

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

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