Work till you drop: Govt pushing up state pension age
By politics.co.uk staff
The government is pushing ahead plans to raise the state pension age by a year, with reports suggesting it could soon be increased to 70 and beyond.
The state pension age could hit 66 by as soon as 2016, eight years earlier than under Labour plans. The age for women would go up to 66 a couple of years later.
“People are living longer and healthier lives than ever, and the last thing we want is to lose their talent and enthusiasm from the workplace due to an arbitrary age limit,” work and pensions secretary Iain Duncan Smith said.
“We also need to recognise that to meet the challenge of providing an affordable, stable pensions system in a society with ever increasing life expectancy, people will need to work longer.”
The default retirement age of 65, when employers can get rid of employees on the basis of their age, is set to be scrapped.
The new policies follow some substantive and well-received reforms in this week’s Budget.
The coalition government is increasing the state pension in line with average earnings from April 2011, although it can stay in line with prices or by 2.5% – whichever is higher.
The move marked a significant victory for the coalition. The previous government toyed with the idea of connecting state pensions to earnings but action had not been forthcoming, leaving the state pension going up by 2.5% or the retail price index, which commonly lags behind average earnings.
“I think the idea of having an increase by one year in the retirement age is accepted,” deputy prime minister Nick Clegg told the BBC.
“It’s just a question of how far you bring it forward. At some point you have to do it.
TUC general secretary Brendan Barber criticised the plans.
“While we welcome the decision to end the arbitrary retirement age, raising the state pension age over this short timescale is clearly driven by a desire to cut spending rather than a planned approach to introducing more flexible retirement,” he said.
“Raising the state pension age will hit the less well-off far more than the rich. 65 year old men in Kensington and Chelsea can expect to live a further 23 years, while those in Glasgow only 14 years.”
