Pensions expert predicts pension age to rise to 70
As a result of growing life expectancy, a pensions guru is predicting that millions of men and women will have to stay in employment until they are 70.
Lord Turner, who 2 years ago said the retirement age would rise to 68 by 2046, believes the state pension age will have to increase further.
On August 1, 1908, the first state pension was introduced by David Lloyd George, the then Liberal Party Chancellor, and was paid only to those aged 70 or over. However, since that time, life expectancy has improved considerably.
On the eve of the 100th anniversary since the pension was introduced, Lord Turner, a former director general of the CBI, said if the value of the pension is to be protected, the retirement age will have to increase again.
Lord Turner added that there appears to be no upper limit on life expectancy so you are not taking retirement away from people by raising the age they cease working. Despite the changes, people are still going to be having longer retirements.
However, the announcement has outraged campaigners and Dr Ros Altmann, former Downing Street pensions adviser, said it may well be that people gradually cut down the amount they work later in life rather than suddenly stop working.
Dr Altmann explained that people shouldn’t be expected to continue to work full-time until a particular age. There should be much more freedom to when and how much you work.
Meanwhile, Neil Duncan-Jordan, of the National Pensioners Campaign, said if the retirement age is raised to 70, for some groups of people, particularly low-paid manual workers, life expectancy is not much beyond 70 or 75.
Furthermore, Mervyn Kohler, of Help the Aged, suggested that life expectancy may not rise as indicated by Lord Turner.
Many health officials are suggesting that growing rates of obesity and other health issues could lead to a fall in life expectancy. Consequently, the pension age should actually fall in those circumstances, added Mr Kohler.
Currently, the annual bill for the basic state pension is £69 billion and is expected to increase to £240 billion by 2050 as people live longer.