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Pension age to 68 within next decade

Plans to increase the state pension age are “unaffordable and irresponsible”, the Institute of Economic Affairs (IEA) has warned.

The think tank has called for a far earlier rise in the state pension age to 68, reaching that level by 2023 instead of around 2045 under existing plans. [Look up your new state pension age]

The Government has already signalled that rises in the state pension age will be accelerated – reaching 68 by the mid-2030s – but the IEA’s proposal would affect the retirement plans of millions of Britons far more radically.

Under the IEA’s proposal, those in their late 50s would see their retirement age rise to 68, rather than the current planned age of 66. Retirement at 68, under current plans, only covers those aged around 35 or under.

The report suggests the state pension age for men and women should increase by two months every quarter from 2018 until it reaches 68 in 2023 and should then be directly linked to life expectancy.

Professor Philip Booth, a director at the Institute of Economic Affairs, said:“The Government needs to wake up to the reality of the long-term state of the public finances.

“People retire earlier on average today than they did in the 1960s despite huge improvements in life expectancy. People should have both the opportunity and incentive to continue some form of paid work into older age.

“Policymakers must urgently implement a coherent package of reforms, including a more rapid increase in the retirement age and a substantial reduction in employment protection legislation which is especially damaging to older people.”

Source The Telegraph

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