IoD calls for increase in pension age

| October 19, 2009 | 0 Comments
IoD calls for increase in pension age

The Institute of Directors (IoD) is calling for the UK state pension age to increase to 70 as soon as “reasonably practical” due to “greatly increased” longevity.

The group argued that the state and private pension systems had become so complex that people were being deterred from saving for their retirement.

The group is also calling for the abolition of most means-tested state retirement benefits.

IoD’s chief economist Graeme Leach comments: “Radical simplification is needed. Startling increases in longevity in recent decades also mean that it is unrealistic to expect to be able to fund a potential 25 to 30-year retirement from an effective 30 to 35-year working life.”

The group is calling for a private retirement system fit for the 21st century arguing “this is a policy journey which needs to begin now.”

In response to the IoD’s report, Brendan Barber of the trade union body, the TUC, said: “The better off you are, the longer you live and the more years you get to claim a state pension.

“A big rise in the state pension age would mean the less well off lose a much bigger proportion of their pension than affluent pensioners, who are much less dependent on the state pension in any case,” he added.

Currently, the state pension age is 60 for women and 65 for men and the Labour Government is planning to increase the state retirement age for men from 65 to 66 in 2026.

Government legislation means that the state pension age will then rise to 67 in 2036 and 68 in 2046.

However earlier this month, the Conservatives said if they win the next election, they will raise the state pension age for men from 65 to 66 from 2016 and did not rule out an increase in the pension age for women towards 66.

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