23 May, 2016
State pension age should rise to 70
Lord Adair Turner has made proposals for the retirement age to increase to 70 by 2030. Currently, the state pension age is set to rise to 68 by 2028, although Lord Tuner said reforms to increase the state pension age should be speeded up.
However, should this plan go ahead, the state pension payment should also increase, said Lord Turner, who is the former chairman of the Pensions Commission.
Additionally, he said the state pension should be staggered, which means tested income payable from age 65.
Workers on a lower wage or in manual labour, which could influence their health, would be able to access their state pension from the age of 65.
In a statement, Lord Turners said to clients: “I would make the state pension more generous at 70 and, in addition, I would introduce forms of state pension or means-tested benefit, which would be available for lower-income people who’ve retired from 65 or 66 onwards”.
“We have failed to think creatively”, he added.
Lord Turner said he planned to meet John Cridland, who the government has given the job of reviewing the state pension age.
Head of retirement policy at Hargreaves Lansdown, Tom McPhail, says, “The state pension is a blunt instrument, which makes no allowance for people’s wealth or their life expectancy. However any deviation from the current state pension entitlement calculation based on a simple NI contribution history to one based on individual circumstances, could be both complicated and contentious”.
He continued, “Radical options, including medical underwriting, means testing, or using the state pension as a long stop for when someone has exhausted their private savings are all possible. The government will no doubt be mindful that it is very difficult to introduce any reform in this area of public policy without upsetting some voters”.