Finance Choices
Retirement at 65 'sacred'
UK residents view retirement at or before 65 as sacred, and do not believe they will live longer than their parents or have to work longer, a new report reveals.
Mistrust of the pensions industry, and the government, is driving the belief - with the people studied by the influential ippr think tank trusting the personal experiences of their friends and family more than studies by government or companies.
"There is a consensus among pension experts that increased life expectancy will make it necessary for us to work longer. Our research shows that the public are not convinced and distrust the evidence from employers, the financial services industry and government, basing their expectations on the experiences of friends and family," said Peter Robinson, ippr senior economist.
But while the public does not believe reports that people in the UK will have to start retiring later or having a poorer retirement, ippr calculates that the age people receive their state pension will have to rise to 67 to make the current system sustainable.
"Raising the state pension age is vital if the UK pensions system is to remain sustainable and cope with the pressure of an ageing population. One way to build a consensus on increasing the state pension age is to link it with an increase in the basic state pension," Mr Robinson added.
The head of the government's pensions commission said earlier this month that the average UK retirement age would "undoubtedly" rise in the wake of the current pensions crisis.
"If there are more pensioners relative to workers, something's got to give," Adair Turner said.
Mr Turner was commissioned by the government to examine ways of handling the UK's growing pensions gap - estimated at £37 billion a year. His report is due out by the end of November.
"If you look at the ratio of people aged over 65 to those aged 20-65, that ratio will something like double by 2040 and when that happens there are only a small number of things we can do about it," Mr Turner commented.
"Those are that we increase the average age of retirement - that will undoubtedly happen, it's beginning to happen already - or we have to have higher taxes to pay for pensions for a larger number of pensioners, or people have to save more themselves in addition to what the state does for them."
The TUC, among others, are heavily opposed to the idea of raising the age at which people receive their state pensions. The trade unions group has concerns that this will see many people 'work until they drop' - especially those on limited incomes - and never receive retirement income.
The ippr today recommends a suite of changes to the pension system to minimise the impact of the current 'crisis'.
Its recommendations include:
Mistrust of the pensions industry, and the government, is driving the belief - with the people studied by the influential ippr think tank trusting the personal experiences of their friends and family more than studies by government or companies.
"There is a consensus among pension experts that increased life expectancy will make it necessary for us to work longer. Our research shows that the public are not convinced and distrust the evidence from employers, the financial services industry and government, basing their expectations on the experiences of friends and family," said Peter Robinson, ippr senior economist.
But while the public does not believe reports that people in the UK will have to start retiring later or having a poorer retirement, ippr calculates that the age people receive their state pension will have to rise to 67 to make the current system sustainable.
"Raising the state pension age is vital if the UK pensions system is to remain sustainable and cope with the pressure of an ageing population. One way to build a consensus on increasing the state pension age is to link it with an increase in the basic state pension," Mr Robinson added.
The head of the government's pensions commission said earlier this month that the average UK retirement age would "undoubtedly" rise in the wake of the current pensions crisis.
"If there are more pensioners relative to workers, something's got to give," Adair Turner said.
Mr Turner was commissioned by the government to examine ways of handling the UK's growing pensions gap - estimated at £37 billion a year. His report is due out by the end of November.
"If you look at the ratio of people aged over 65 to those aged 20-65, that ratio will something like double by 2040 and when that happens there are only a small number of things we can do about it," Mr Turner commented.
"Those are that we increase the average age of retirement - that will undoubtedly happen, it's beginning to happen already - or we have to have higher taxes to pay for pensions for a larger number of pensioners, or people have to save more themselves in addition to what the state does for them."
The TUC, among others, are heavily opposed to the idea of raising the age at which people receive their state pensions. The trade unions group has concerns that this will see many people 'work until they drop' - especially those on limited incomes - and never receive retirement income.
The ippr today recommends a suite of changes to the pension system to minimise the impact of the current 'crisis'.
Its recommendations include:
- Raising the basic state pension to just above the relative poverty line and ensuring it retains its value in relation to earnings in the future.
- Phasing out both the pension credit and state second pension since, with an enhanced non means-tested basic pension, they would be redundant.
- Raising the state pension age to 67 by 2030 to give a clear signal to the current workforce that we will need to work longer and to ensure the overall settlement is affordable over the long run.
- Simplifying the tax treatment of savings so that pensions are the most tax-favoured form of saving.
posted by Bruce Wayne at 12:33 PM
Retirement at 65 'sacred'
2 Comments:
The mess the government are making of state pensions mean I doubt there will be anything when I retire.
Of course they'll look after public sector workers like they always have done and the rest of us can go to hell!
I never felt work should be the focal point of one's life, unless, of course, you love your work and that's what you choose.
But so many labor so many years at a job they don't enjoy, then retire so late in life they can't enjoy it due to health problems or advanced age.
Americans work far long days with less vacation time, than much of the world. I have so many interests i'd like to pursue. And i want to enjoy the good health i have now to do that when i retire. So i say a retirement age of 60 or EARLIER, like 55.
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