Britain's retirement age will "undoubtedly" rise


The head of the government-appointed Pensions Commission has said that Britain's retirement age will have to rise as part of the strategy to confront the country's £27 billion pensions black hole.

In an interview with Sky Television, Adair Turner hinted that his proposals would include a combination of later retirement, higher taxes and increased personal savings.

"People are going to have to work longer," He said. "The important thing is to distinguish the idea of people working longer from the issue of when you get the state pension."

Increasing the average age of retirement would "undoubtedly happen", Turner said, while Britons have to get away from the idea of working up until a set age and then stopping altogether.

"It may well be that people continue to get a state pension at 65 - that's a possibility -but they will also work alongside that to supplement it and they will get income from a variety of sources," he added.

The Commission is expected to publish its final report recommending changes to the pensions system at the end of November.

But in a report last week, the TUC attacked the idea of raising the retirement age, describing it as a "quick fix solution".

Instead, the TUC claimed that increasing the proportion of the working-age population in paid jobs from its current seven out of 10 to eight out of 10 would increase national income to a sufficient extent to support the growing elderly population.

This would mean creating one million extra jobs by 2015, two million by 2024 and three million by 2042.

"There is an alternative to a 'work-til-you-drop' rise in the pension age, and that is to help those below the pension age get a job and make a full economic contribution so that there are more people in work under 65 paying taxes and creating wealth," said TUC general secretary Brendan Barber.

"It's perhaps not obvious, but the best way of paying for better pensions is to get the economy working even better. And best of all, we do not need to do this overnight, we have a generation in which to get this right."

But whatever solution ultimately emerges, Adair Turner delivered a blunt warning for the future.

"People for whom life is going to be more difficult in future than it was in the past are people on average earnings, the people in the middle. Those at the bottom, of course they will be the poorest, but they will probably be as well looked after as they were before. "It's people in the middle, and in particular younger people failing to make provision for the future, where what can happen in the future is going to be most different from the past."