UK -- The Institute for Public Policy Research (ippr) has suggested raising the UK state pension age to 67 from the current 65 between 2020 and 2030 to reflect increased life expectancy.

The proposal is contained in a new report, Working Later: Raising the Effective Age of Retirement, which was published today by the ippr. The study argued that the change is necessary “if the UK pensions system is to be sustainable”.

The research pointed out that workers do not accept that they may need to work longer before collecting the state pension and that they “mistrust“ the government, the financial services industry and employers.

Report author Peter Robinson said: "This distrust means it is vital that the government achieve its objective of a popular consensus for pension reform.”

Robinson, who is also a ippr senior economist, added: "One way to build a consensus on increasing the state pension age is to link it with an increase in the basic state pension."

However, Brendan Barber, general secretary of the Trades Union Congress (TUC), responded: “Work-until-you-drop policies of putting up the state pension age will hit the poorest hardest.” Barber pointed out that “decent pensions” from 65 could be afforded.

“This report would have been more useful if it had looked at ways of extending real choice, such as countering employer prejudice against employing older people and promoting more flexible routes to retirement through part-time work,” Barber commented.

Based on eight focus groups including men and women between aged between 25 and 55 and living in London, Birmingham and Brighton, the study found that people view retirement at or before 65 as “sacred”.

However, many said that they did not intend to rely on the state pension but still planned to retire at 65 but remained “hostile” to the suggestion to work longer before the state pension.

The sample did not appear to accept either that life expectancy was increasing.

According to the Government Actuaries Department, a 19-year-old male in the UK who will reach 65 in 2051 is projected to live until 87 while an equivalent young woman will live until nearly 90.

The study suggests a number of possible ways to implement the changes smoothly, including simplifying the tax treatment of savings so that pensions are “the most tax-favoured form of saving”.


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