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The Actuary The magazine of the Institute & Faculty of Actuaries

65, 66… any advance on 70?

This month’s first salvo in the retirement age debate comes from the Institute of Directors, which is calling for the state pension age to rise swiftly to 70. Similarly, the National Institute for Economic and Social Research says, “The state pension age must be raised to 70 by 2015 and income support for the over-60s, including benefits such as free bus passes, phased out.”

Coming on the back of the Conservative party call for an acceleration of the rises already programmed into legislation, this seems a topic likely to receive early attention if there was to be a change of government after next year’s general election. Marcus Hurd of Aon likened state pensions to pyramid insurance: “You need to keep feeding the bottom to fund those retiring at the top”.

The Institute of Directors also calls for a much more substantial state pension to take people out of the need to claim pension credit. As personal accounts and auto-enrolment into pension plans develop following 2012, we can expect to see more calls for changes to remove the tendency for means-tested benefits to act as a deterrent to better saving.