The Institute for Economic Affairs paper published recently suggested that the UK state pension age for both men and women should be increased by two months every quarter from November 2018. It would thus reach 68 by January 2023.
Fraser Smart, Managing Director (Europe) of Buck Consultants, commented:
“The UK has one of the least generous state pension systems in western Europe and for many people, it’s not that the arrival of their state pension is an incentive to leave work, it’s that they cannot afford to retire until they get the state pension. Moreover, many people will have factored the date of getting the state pension into their retirement plans, after all they have been paying for it for all their working lives. Postponing the already ungenerous state pension for a number of extra years will force them to remain in employment longer against their will. This is just not on for those too close to retirement to make significant changes to their pension savings now.
“Individuals caught by this proposed dramatic rise in state pension age would all have less than 10 years to reach what they believed was the age at which they would draw their state old age pension. All of them would have seen increases in their state pension age already.
“Whilst a long term increase in the age at which state pension becomes payable is seen as politically acceptable these days, and proposed rises have not proved a vote loser so far, any increases must be balanced by the need to protect those who are close to retirement and don’t have the time (even if they have the money) to readjust their retirement plans to allow for losing the state pension for a considerable extra period of time.
“The proposal would see individuals affected having to work for three months to get one month closer to their state old age pension. My view, which I am expressing not for the first time, is that it is great if older workers want to work on into their late 60s or beyond, but they should not be forced to work on because they cannot afford to retire.”
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