Tuesday 29 June 2010

Last week the UK coalition government announced plans to increase the state retirement age to 66 for men by as early as 2016; with further proposals that it should be raised to age 70 for both men and women during the next few decades.  The government also announced plans to consult on axing the default retirement age of 65, the age at which employers can force staff to retire.  According to the Work and Pensions Secretary Ian Duncan Smith, these measures have been suggested due to the fact that people are living longer and healthier lives, but what implications would they have for future generations?

Bill Carson, Chair of Age Sector Platform, says that each individual is different; and therefore this issue is all about choice.  He commented: “People should be able to work past the age of 65 if they want to, whilst others who can not continue to work must be assured that retirement will not leave them in dire financial difficulties.”

“Age Sector Platform welcomes the government’s announcement that they will consult on the abolition of the default retirement age, which will allow people to work longer if they so wish.  However, increasing the age at which people receive their state pension will have obvious financial implications for those who are unable to work longer.”

“It is interesting to note that the government has stated they will ‘reward longer working life by making sure that when people retire their pension is worth getting’.  Considering the current inadequacy of the state pension, a significant increase is needed to ensure this promise becomes a reality.”

“The variation in life expectancy across the UK is also of significance, since a higher state retirement age may mean people working until they drop in certain areas.  A person’s life expectancy and the number of healthy years that they will enjoy are intricately linked with where they live, what their job is and how affluent they are.  So essentially this means that those living in poorer areas and working manual jobs may find themselves in a situation where they are unable to work and unable to claim their state pension.  Future generations must start thinking about retirement early in order to ensure they do not become another pensioner living in poverty.”