Reports suggest raising state pension age

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I'm sure many people will find these recommendations unwelcome if/when they come into being. However, there also needs to be a balance between what provision people want and how they (or others) are ...


Read More Rob Serjeant
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The increases recommended would affect around 5.8 million people if brought into effect

The state pension age should rise to 68 by 2039, according to recommendations from the Cridland report published today.

A separate report by the Government Actuary’s Department suggests a state pension age of 70 for anyone born after 6 April 1986, which would be those aged 30 or younger today.

These changes will affect around 5.8 million people if brought into effect.

Tom McPhail, head of retirement policy for Hargreaves Lansdown, said the recommendations will not be welcomed by many. “This report is going to be particularly unwelcome for anyone in their early 40s, as they’re now likely to see their state pension age pushed back another year,” he said. “For those in their 30s and younger it reinforces the expectation of a state pension from age 70, which means an extra two years of work. This report also looks like the death knell for the state pension triple lock.

“The good news, in as much as there is any here, is that these measures will help to keep the state pension sustainable in the long term. The proposals around a mid-life MOT [in the Cridland report], employment opportunities for older workers, and split deferral of the state pension should all help to extend working lives.”

Charles Cotton, performance and reward adviser at the CIPD, said the introduction of a ‘mid-life MOT’ to discuss retirement options is a good strategy.

“Raising the state pension age is a sensible move to balance these competing challenges, and the introduction of a ‘mid-life MOT’ is very welcome,” he said. “This will help people plan for retirement by assessing their lifestyle and retirement expectations as well as their skills. It will not only help set their expectations but also give them opportunity to invest in the skills and training they may need to support themselves in later working life.”

Anna Dixon, chief executive of the Centre for Ageing Better, suggested employers should be taking steps to improve the wellbeing of older people in work.

“We urge employers to make workplaces and employment practices more age-friendly,” she said. “This means recognising the contribution older workers make; treating them fairly, especially when it comes to opportunities for development and progression; and tackling all forms of ageism and discrimination in the workplace. The proposals for mid-life MOTs and supporting older workers to become mentors and trainers are welcome.”

Comments

I'm sure many people will find these recommendations unwelcome if/when they come into being. However, there also needs to be a balance between what provision people want and how they (or others) are going to fund it. Clearly, there needs to be adequate time for people to re-assess their preparations for retirement, but I think we should be moving in the proposed direction much quicker. That's if we're not going to kick the can down the road, leaving our financial mess to the next generation(s).


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