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State pension age to rise to 66 as early as 2016

Default retirement age also set to be scrapped in major shake-up of pension system.

 
State pension age to rise to 66 as early as 2016

The state pension age for men will rise to 66 as early as 2016 – ten years earlier than originally planned, the government is expected to announce today.

Meanwhile the default retirement age – under which companies can force employees to retire at age 65 – will also be scrapped, under proposals set to be unveiled by work and pensions secretary Iain Duncan Smith and pensions minister Steve Webb.

Under Labour the state pension age was to rise to 66 by 2024, before climbing to 67 by 2036 and 68 by 2046. However, the new coalition government has decided that more drastic action is required and that people should be allowed to work as long as they want to.

‘People are living longer and healthier lives than ever, and the last thing we want is to lose their skills and experience from the workplace due to an arbitrary age limit,’ Duncan Smith told the Telegraph today.

‘Now is absolutely the right time to live up to our responsibility to reform our outdated pension system and to take action where the previous government failed to do so. If Britain is to have a stable, affordable pension system, people need to work longer, but we will reward their hard work with a decent state pension that will enable them to enjoy quality of life in their retirement.’

30 comments so far. Why not have your say?

clive norbury

Jun 24, 2010 at 09:42

Ah but the longer you leave it to retirement the earlier you die! Cunning plan by the goverment!

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R Saavedra

Jun 24, 2010 at 09:50

So the idea it to work till we die !!!!!!!!

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S Herceg

Jun 24, 2010 at 09:54

Not everyone is living longer, when you look at the class divide, the well-off are living longer than the poor. The well-off also are less likely to draw on the state pension, where many poor in the future may never live long enough to qualify for it.

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Anonymous 1 needed this 'off the record'

Jun 24, 2010 at 09:54

The longer you delay paying peoples Pensions the less you will pay and the more are likely to die off before even getting a penny of their retirement "pot". The government are not stupid - we are living too long and there are not enough people dieing in wars as previous wars.!

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Grumpy Old Man

Jun 24, 2010 at 10:01

We may not live any longer, but it will feel like that for some people, especially if they have't got a pension pot to piss in!

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Dave Baigent

Jun 24, 2010 at 10:10

I am being compulsorily retired in August by my university because I am 65.

Please hurry up with this change in the age at which employers are allowed to discriminate against people and make them second class citizens because of age.

I want to work and I am capable of working. My students support me and have established a website to help my campaign http://www.facebook.com/group.php?v=wall&ref=mf&gid=109483425742898 but I have lost my appeal to the university – now only a change in the law can help.

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Ian

Jun 24, 2010 at 10:17

People should take semi-retirement at 60 and work part time until they are 70. This is for the majority a pleasant way of life as working is better than doing nothing from a health perspective. People in this age group usually have considerable experience and can pass this on to the younger generation meaning that they remain valued employees. They are better off working and there is less burden on the overstretched state pension scheme and on the private sector as a result.

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Redundant (Old Timer?)

Jun 24, 2010 at 10:25

It is fine to scrap the retirement age, but that will only work for those in employment. If you are made redundant in your late fifties age discrimination in this country is rife and finding full time work is nigh impossible - At 59 I know, as I keep being told (over the last 16 months) that I am too experienced to do the same kind of senior management role I had previously done and would be bored with more junior roles. So my all means scrap the retirement age BUT make sure that those who want to work can actually get employment!

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Nigel

Jun 24, 2010 at 10:25

Well it will take you that long to save up for the downpayment for a house now anyway. No joke really... Considering banks want 30% and the average family sized house is £500,000 that is a downpayment of £150,000. The average salary is around£30,000 and saves £500 per month would require 25 years to save that much and another 25 years to pay it off.

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Tony

Jun 24, 2010 at 10:37

By all means raise the retirement age, but what about raising or removing the age for taking a compulsory annuity from a pension fund?

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Grumpy Old Man

Jun 24, 2010 at 10:45

Old Timer,I agree with what you say.I found it impossible to find a job after my last one finished at almost 56!

Another thing to consider;if a load of people carry on working as long as they want to....either part or full time,what happens to the other side of the equation?i.e.the youngsters who will find even less opportunities available to them.The last thing we want in this country is an increasing number of dissaffected young people....there are enough already.It is incredibly difficult for even well educated youngsters to find good jobs these days and I do feel sorry for them.

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Anonymous 2 needed this 'off the record'

Jun 24, 2010 at 10:47

Nigel - do you live in Chelsea/Westminster?

I can assure you that a nice 4 bedroom family house can be bought in many parts of the country for 250k.

Assuming the main earner in a family is on 30k and the second earner 20k, basic rate tax would be mean take of c38k. Costs at say 25-26k should mean being able to save 1k per month. On the basis of needing 75k deposit that would take just over 6 years NOT 25.

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Andrew Gilliat

Jun 24, 2010 at 11:10

With more and more people only starting to earn after 3+ years of university and with the near impossibility of finding money for a pension as well as for a home and repayment of student debt, the increase in default retirement age is too little and too late. My generation has been lucky; some of us are enjoying final salary pension payments. The young don't seem to realise what's in store for them (or rather what is NOT in store for them). The government's advisers are going to come up with some shocking revelations very soon.

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Anonymous 3 needed this 'off the record'

Jun 24, 2010 at 11:14

Anonymous 2

No I live in Surrey and most of the south is in that range of £500K + for a three bed semi detached house. I live and currently rent in Guildford a two bed flat. It would be great to live in areas of the UK where there are 4 bed homes for £250K but I have yet to see one without doing a two hour commute to work as most good jobs are in the south. So even with two people working then you still have 12 years to save the £150K with your calcs. Now if only one working that would be atleat 20 years.

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Anonymous 4 needed this 'off the record'

Jun 24, 2010 at 11:24

Perhaps we should have some of the jobs in the North.

then you could get on your bike !

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DAVID ROBERTSON

Jun 24, 2010 at 11:26

I agree with grumpy old man. There's no point saving state pension at one end (and this is all about govt cost saving regardless of how it's dressed up) and then having to pay benefits to young people who may never have had the chance of a decent job and thereby saving for a deposit on a property. Most of these older people don't need the money from a full time job so why should they deny opportunities to those who do.

Tony, hidden away in the budget notes are plans to consider the scrapping of compulsory annuities. Didn't say how long it was likely to take before coming in to law though.

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Anonymous 5 needed this 'off the record'

Jun 24, 2010 at 11:28

Why not spend your life in prison or not work at all then you can become eligble to pension credit at the age of 60?

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Boris

Jun 24, 2010 at 11:30

Currently, taking the State Retirement Pension can be delayed by any number of years in exchange for an enhanced pension at the rate of about 10% per year deferred. Why not apply the opposite principle? Allow a reduced pension to be taken early, provided the reduction does not need 'topping up' with other benefits.

It is absurd to prescribe a retirement age for the whole population based on 'average' mortality when some have much lower life expectancy than the average and may not live to draw the pension.

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s taylor

Jun 24, 2010 at 11:38

lets not forget that as things stand, whilst most of us can "look forward" to working longer and retiring later, public sector workers retire on average 9 years earlier!! And oh, we pay for it too!!

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Jonathan

Jun 24, 2010 at 11:58

Something was left off this article: 'FOR MEN ONLY'. In this world of equal rights and the fact that women live longer you would think they could put a bit of equality into this rule.

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Anonoymous1

Jun 24, 2010 at 12:01

Boris, you made an excellent post there.

I doubt that I will see 65 but I got lucky with my investments so sold up house & shares in 2008 whilst aged 50, and relocated to a cheaper, warmer country.

Thankfully I am not relying on a state pension but wholly agree on having a flexible retirement age.

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Marilynn

Jun 24, 2010 at 12:04

I'd like to go part time once I'm 60 or even retire. So I look at it as making way for someone who has just started on their career path with fresh ideas and outlook. Provided the company replaces me that is.

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Alan Cork

Jun 24, 2010 at 12:25

I am 66 and retired last year. I started work full time at 15 and I have worked for 50 years so I feel I have earned my time to relax in my twilight years while I am still fit and active anough to enjoy it. What has changed since I started out in my career is that people today don't seem to start work till they are in their late 20s or even in their 30s with all their university years and gap years. So with people today not starting out being part of the workforce and contributing to society so many years later they should be able to work and contribute a few years longer at the end of their careers.

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Jan Clarke

Jun 24, 2010 at 12:43

No mention yet of the intention with female state pensions? Being one of the last who had the choice of paying 'half stamp' but who chose to pay 'full stamp' on the basis of an independent pension at 60, I shall be highly annoyed if I have to wait even longer - my age profile has already had state pension deferred until 64 years and 11 months. This is tantamount to fraud, particularly as I've paid in a fortune in tax and NI over the years. Also, high earners through the 80's, 90's and beyond have very often operated at extreme stress levels and may not make it to the far distant 'Golden Years'. I appreciate the mess the country is in, but my generation of women has already had the goalposts moved once and ONCE IS ENOUGH!

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BlueH20

Jun 24, 2010 at 13:11

To Anonymous 1 - where did you go?

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Jonathan

Jun 24, 2010 at 14:10

Jan Clarke, Why should you get better treatment than men just because you're a woman?

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Colin Newbury

Jun 24, 2010 at 14:52

Jan Claeke - stop whinging, women have had it too goo for too long. Remember equality!

The idea of going part-time once 60 seems to be quite sensible, employers would of course have to embrace this.

I agree for purchase ofd annuity is ridiculous, hopefully the age limit will be increase or even scrapped by this govt.

I also hear Alan Cork - I started working age 16, with these children starting at 20-30 yrs. it'll hardly be a hardship to add a few years to the end of their career.

Pension age HAS to increas we oldies are being a burden on the young workers thanks to MANY years of the PONZI scheme adopted by our Govt.

BTW. At 51, the days of my taking the state pension are slipping further and further away, but necessary personal sacrifics are necessary for the good of all.

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Harishbabu Karia

Jun 24, 2010 at 17:01

O.K. Make the retirement age to 66 , that means the unemployment will autometically rise >>>> and the claiments of unemployment benefit will increase !! Because the old guys are still at work and not retired !!

Therefore the youngsters are not going to find the jobs !!!

"BASIC STATE PENSION" should be tax free for all pensioners >>>> They have paid their NI dues >>>

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Jan Clarke

Jun 24, 2010 at 20:21

Jonathan & Colin Newbury: you're missing the point - women of my age (55) had a CHOICE of paying lower NI or full NI. The state therefore, at that time, made a differentiation between women and men. The point I make is that having opted to match men's contribution and having a perceived defined retirement age (albeit thanks to the state at the time, lower than men, we have already been 'shafted'. The other point I should make is that I agree with Alan Cork: I started work at a young age, worked full time for many years and never had a break. I suspect there are very few like me - I often wondered why some clever female lawyer (my age) didn't challenge the change based on the choice element but I've latterly realised that anyone who did legal (or other university based) training would have started work much later than I did and would therefore have missed the option to choose to pay at the lower level NI. I remain convinced that this is inequitable. This, for me, is not a 'sex war' issue but one of common sense. I Hope that male readers can put asside their pre-conceptions and over reactice prejudices to give it full consideration.

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Broomtree

Jun 25, 2010 at 23:01

I can understand and accept the need to adjust the retirement age but I suspect this change is being done with little thought for those in the final stages of the process of working towards retirement. Under the Labour scheme it appears to have been spread over ten year periods giving people time to adjust. In my own case at 55 last year I started to change the risk profile of my pension, with the way the markets have gone and the uncertainty in the bond market it becoming ever more difficult to protect [let alone grow] your pension pot, we could well do without government making off the cuff knee-jerk changes!

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