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Extending working lives essential - UK minister

UK – The UK’s pensions minister has defended the government’s plans to offer a lump sum to people who retire late, saying that extending working lives is essential.

“Through the pension credit, enhanced occupational pensions protection and simplification of pensions taxation, we are taking radical measures to enhance security for retirement,” Smith said.

“But for a future where people will be living longer, the agenda off extending working lives is surely also essential, and all the better when we can address it through proposals, such as the lump sum, that genuinely extend choice,” Smith wrote in a letter to the Financial Times.

Earlier this month Smith announced plans to pay a lump sum of up to 30,000 pounds (43,000 euros) to people who defer their retirement for five years – though he rejected a raise in the state retirement age. The announcement met with a mixed response, with some observers welcoming it while others called it a gimmick.

“What the lump sum will do is bring home to people how retirement prospects can be enhanced significantly where they choose to work a little longer,” Smith wrote today.

Meanwhile pensions minister Malcolm Wicks has said that the “live for today” culture is setting young people up for a shock in retirement.

He told a conference today: “Young people are spending an average of 96 pounds a week on leisure activities and the consumer culture in which we live, and yet most people say they want to retire on a pension worth two-thirds of their final salary.”

"Good pensions mean partnership. Government and employers both have a vital role. But let's face up to the facts: individual responsibility is crucial, and this is especially true for young people where pension savings are often low.”

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