Q&A: Raising the pension age by Finance News Bulletin

Published: 27/02/07

A political storm is brewing over proposals to lift the state pension age to 67 and connection future rises in the pension to earnings rather than salaryLord Turner's pensions commission is expected to call for such steps in a report to be in print on 30 NovemberBut Chancellor Gordon Brown is reported to have described linking the condition pension to wages as"Unaffordable"The current payment for solitary pensioners is £84

25 a week, while a married pair receives £13475 a weekBut the pension age for women is already leaving to be raised by five years This means that women will also have to retire at 65

This change will be phased in between 2010 and 2020The National Association of retirement fund Funds has suggested a pension age of 67 by 2030, rising to 69 years of age by 2040In its view that would assist pay for the cost of increasing pensions in row with earnings, rather than the less kind policy which operates now of putting them up in line with inflationThe Institute of Directors has demanded that the retirement fund age be put up to 70 by 2035

The CBI, too, has called for populace to retire laterThere's a widespread belief that pension reform is necessary because, on standard, we are living longer This means that money put aside for pensions has to be paid out over a longer timeFor instance, the amount of money salaried out in state pensions last year was £47bn

So if we continue to live longer it becomes very expensive for the government to finance the additional payments out of taxationAccording to the administration Actuary's Department, in 1981 a man in the UK aged 60 could expect to exist for, on average, an extra 163 yearsBy 2003, that had greater than before by 3

8 years to 201, giving an average life expectancy of 801 yearsFor 60-year-old women, the similar increase over the same period has been two and a half years, charitable an average life expectancy of 83

3 yearsSome of them, especially those with members in the community services, have fought off a suggestion that obtainable members of several big public sector pension schemes should see their retirement age go up from 60 to 65This will now come in only for new joiners to the social service, NHS and teachers pension schemesThe unions would prefer to keep the existing retirement era but ensure that both employers and employees contribute more to required schemes

Annuity reform Women 1 Women 2 Pension rights separation Work pensions Lump sums Pension Credit ice-covered pensions Shortfalls Overseas pension

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