A better pension - but not until you're 67

Nov 17 2005 by Brian Amble Print This Article

As was widely expected, a more generous state pension in return for working longer will be among the main recommendations made to reform Britain's pension system by Lord Adair Turner's Pension Commission in its report to be published later this month.

According to the Financial Times, Turner will recommend that the age at which workers can claim their full state pension should rise from 65 to 67.

He will also call for a new national pension savings plan into which individuals will automatically be enrolled, although they will retain the right to opt out.

But how the proposed increase in retirements age will be applied to Britain's public sector – which has already seen down government attempts to raise their retirement age from 60 to 65 with threats of widespread strike action – remains to be seen.

The FT reports also says that the report will call for the state pension to be made more generous, "in time paying out closer to the £109 a week that is now the means-tested minimum income guarantee rather than the £80 a week for the basic state pension. It should also rise in line with earnings, not just prices.

"That would add billions of pounds to taxation and public spending by 2050 but the bill should be offset by raising the state pension age from 65 to 67, the commission will say."

Financial Times | Turner pensions blueprint to recommend later pension