Working till 71 to receive state pension, experts warn

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30 Jan, 2018

Working till 71 to receive state pension, experts warn

The UK’s state pension age will need to be raised by about a year for every decade under current measures, warns the Government’s Actuary Department (GAD).

From 2020, the State Pension age in the UK will increase for both men and women to 66-years-of-age and to 67 between 2026 and 2028. Now, the report from GAD warns that the younger generation (millennials) will have to keep working until 71 before receiving their state pension.

Experts in providing actuarial analysis and advice, the government body also said National Insurance rates may have to soar to keep the pension pot sustainable or risk being burned out entirely by 2033. As reported on the Daily Mail, the report said that the fund would not remain in balance unless NI rates rose by 5 percentage points, adding £1,000 to the average worker’s annual tax bill.

To cope with an ageing population, the report states that those people currently aged around 20 will work till 71 whilst those in their 30s must wait until 69 (207-2049) to receive their state pension benefits.

Raising the state pension age is controversial as it forces the younger generation to work longer to fund the pensions of those who are already retired.

Former pensions minister Baroness Altmann said: “Difficult decisions will need to be taken to deal with the future increases in state pension costs that are forecast for coming decades”.

A spokesman for the Treasury said: “We expect the fund to have a surplus for the foreseeable future”.

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