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Raising retirement to 71 will condemn millions of next generation of older people to misery

Government policymakers must dismiss new proposals to raise the retirement age to 71 as a fix-all for the UK’s ageing population.


The National Pensioners’ Convention believes pushing up the age we can claim our State Pension so high will make things worse not better. It would considerably add to the 2.1 million pensioners – 1 in 5 – already living in poverty and condemn even more to a miserable retirement, as well as increase pressure on already struggling public services.


Like former Pensions Minister Ros Altman* we think the suggestion from the International Longevity Centre** would be ‘unconscionable’ and only favours higher income groups. Especially so in the light of two new reports** that show how current state pensions provide well below the minimum income needed to cover a person’s basic needs.


NPC General Secretary Jan Shortt said: “It is time government policymakers sat down with public, private and third sector groups to develop a new, holistic plan to ensure no one falls into poverty as they age in our country, one of the richest in the world.


“The latest proposal to push retirement up to 71 in no way reflects the harsh reality of getting older in the UK. 


“Although the number of people living longer has been rising, the number of those living with ill health and therefore not able to work longer, is also rising. So, making them wait to claim their pension for even longer would only increase poverty, and the demand on already creaking services such as health and care.


“It is not enough to say the country can’t afford the pensions bill for an ageing population - the nation won’t be able to afford an epidemic of elder poverty and illness in the next decade if they do nothing.


 “That’s why we agree with Baroness Ros Altmann who says government ‘policy must consider other ways to save money to ensure greater fairness and flexibility’ in future.”


The NPC is already calling for the next scheduled retirement age increases to be shelved, with our 68 Is Too Late campaign in collaboration with Unite and the Scottish Pensioners’ Forum.  At present, the UK pension age of 66 is set to rise to 67 between May 2026 and March 2028. From 2044, it is expected to rise to 68. Today there are almost 11 million people aged 65 and over - 19% or nearly one in five of the total population.  In 10 years time this will have increased to almost 13 million people or 22% of the population.


*Baroness Altmann’s paper, ‘12 Reasons Why Raising the State Pension Age to 71 is Unconscionable’- www.pensionsandsavings.com/12-reasons-why-raising-state-pension-age-to-71-should-be-unconscionable  – outlines clearly the rationale against the further hike suggested by the International Longevity Centre.


Jan Shortt added: “It is wrong to assume every pensioner gets the new top rate weekly pension of £203.85 a week (rising to £221.20 from April).  Most retirees – especially women - are on the older/lower rate, or less.  Even if they qualify for entitlements like housing benefit, or have small occupational pensions, their income still cannot keep pace with rising costs.”


**According to the pensions’ industry body, Pensions and Lifetime Savings Association (PLSA) - www.plsa.co.uk/Press-Centre/Press-Releases/Article/Latest-Retirement-Living-Standards-show-change-of-UK-public-expectations - a single person will need £31,300 a year for a moderate income in retirement. Using evidence from focus groups, the pensions’ industry body found the rising cost of food and energy costs, plus an expectation to offer financial support to grandchildren. PLSA estimate that a single person needs £14,400 a year for a minimum income and £43,100 a year for a comfortable retirement. Couples required a joint £22,400 at the minimum level, £43,100 at a moderate level, and £59,000 at a comfortable level.


**The NOW: Pensions’ Report - www.nowpensions.com/about-us/fair-pensions-for-all/gender-pensions-gap - has found that women ‘need to work an ‘extra 19 years typically to close pensions gender gap.’ Researchers found that labour market inequalities, including differing working patterns and the gender pay gap, contribute to the pension gap. Women retire on average with pension savings of £69,000, compared with £205,000 for men, says the research by pensions provider. By their late 50s, women have average pension savings worth less than two-thirds of men's pensions savings.


** The International Longevity Centre www.ilcuk.org.uk/ageing-populations-forced-to-increase-state-pension-age-to-71-by-2050-to-maintain-dependency-ratio suggests the retirement age will have to rise to 71 for middle-aged workers across the UK, after research into the impact of growing life expectancy and falling birth rates on the state pension.  The ILC argues that the UK state pension age would need to be 70 or 71 compared with 66 now, to maintain the status quo of the number of workers per state pensioner.  The Centre says if you bring preventable ill health into the equation, the age would have to increase even more.


According to the Office for Budget Responsibility, pensioner benefits will cost the UK government £136bn in 2023-24, of which £124bn will be spent on state pensions.

ENDS


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