Retirement age will ‘undoubtedly’ rise
The average UK retirement age will “undoubtedly” rise in the wake of the current pensions crisis, the head of the government’s Pension Commission has said.
“If there are more pensioners relative to workers, something’s got to give,” Adair Turner said yesterday.
Mr Turner was commissioned by the government to examine ways of handling the UK’s growing pensions gap – estimated at £27 billion a year. His report is due out by the end of November.
He said that people must work longer, and that many already are, but the key matter was when people received their state pension.
“If you look at the ratio of people aged over 65 to those aged 20-65, that ratio will something like double by 2040 and when that happens there are only a small number of things we can do about it,” Mr Turner told Sky News.
“Those are that we increase the average age of retirement – that will undoubtedly happen, it’s beginning to happen already – or we have to have higher taxes to pay for pensions for a larger number of pensioners, or people have to save more themselves in addition to what the state does for them.”
The TUC, among others, is heavily opposed to the idea of raising the age at which people receive their state pensions. The trade unions group has concerns that this will see many people ‘work until they drop’ – especially those on limited incomes – and never receive retirement income.
Mr Turner said yesterday that those on average earnings would be hardest hit by the pensions gap – estimating that as things stand, 12 million people face poverty in retirement.
But he did not commit to raising the age state pensions would have to be paid – noting: “It may well be that people continue to get a state pension at 65, but they will also work alongside that to supplement it and they’ll get income from a variety of sources.
“People are going to have to work longer. The important thing is to distinguish the idea of people working longer from the issue of when you get the state pension.”
