Retirement age should be 67, says think tank
The retirement age should be raised to 67 according to report by an influential think-tank.
The Institute for Public Policy Research (IPPR) makes the recommendation as a way to tackle the UK’s £27 billion pension time bomb.
But the report says it may prove difficult to persuade the public that later retirement is necessary because of mistrust in the financial services industry, the government and employers.
Many people expect their health to decline at 70 and believe 65 is the right age to stop working, says the IPPR. And few believe they will live longer than their parents, as statistics suggest.
Peter Robinson, one of the authors of the report and a senior economist at the IPPR, said analysts believed increased life expectancy would make it necessary for people to work longer to sustain the pensions system.
“Our research shows that the public are not convinced, and distrust the evidence from employers, the financial services industry and government, basing their expectations on the experiences of friends and family.
“This distrust means it is vital that the government achieve its objective of a popular consensus for pension reform.”
“Raising the state pension age is vital if the UK pensions system is to remain sustainable and cope with the pressure of an ageing population,” he added.
Pensions minister Stephen Timms said the government was working on educating people on pensions and retirement. He said the government had “no plans” to raise the retirement age but welcomed “giving people increased choice as they plan for their retirement, for example, voluntarily deferring their state pension for a few years”.
Nigel Waterson, Tory pensions spokesman, said the government should give people more flexibility to work longer.
“If the government expects people to work longer, they need to provide incentives,” he said.
TUC general secretary Brendan Barber criticised the “work till you drop” policy suggested in the report. He said the government could afford pensions at the age of 65 and later retirement would just hit the poorest.
“This report would have been more useful if it had looked at ways of extending real choice, such as countering employer prejudice against employing older people and promoting more flexible routes to retirement through part-time work,” Mr Barber said.
A man retiring in 2051 can expect to live until 87, and a woman can expect to live to the age of 90, according to government statistics.
