Pensions

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Bosses call for later pension age

The UK state pension age should increase to 70 as soon as possible because people are living longer, the Institute of Directors (IoD) has said.

The group wants a "radical simplification" of the pension system including the abolition of most means-tested retirement benefits. The savings should be used to raise the basic state pension, it suggested. But the TUC said that the suggestions would benefit the better-off much more than others.

Saving

The IoD report said that the state and private pension systems had become so complex that people were being put off saving for their retirement. It was also becoming increasingly expensive to cover the cost as people lived longer, the IoD's chief economist Graeme Leach said. "Startling increases in longevity in recent decades also mean that it is unrealistic to expect to be able to fund a potential 25 to 30 year retirement from an effective 30 to 35 year working life."

But TUC general secretary Brendan Barber said that such a move would leave many older people in limbo, where they were too old to work and too young to claim a state pension. "The better off you are, the longer you live and the more years you get to claim a state pension," he said. "A big rise in the state pension age would mean the less well-off lose a much bigger proportion of their pension than longer-living affluent pensioners, who are much less dependent on the state pension in any case."

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