Report: Raise UK Retirement Age to 67

July 25, 2005 ( - An influential UK think tank now asserts that the country's retirement age should be bumped up to 67 by 2030 to solve the current pension crisis.

But the report by Institute for Public Policy Research (IPPR) predicted that the move would be unpopular because younger people expect to die sooner than government life expectancy figures show they will, according to a report in The Guardian.

IPPR focus groups showed that most people think their health will begin to decline at 70 and want to retire at 65, while they are fit enough to enjoy their leisure time. However, according to the government, life expectancy for a 19-year-old man is 87 years, while a woman of the same age will live to nearly 90.

The IPPR report comes months before Adair Turner, the head of the pensions commission, presents his findings on how to tackle the crisis. He recently said the retirement age would “undoubtedly” have to rise (See   UK Pension Official: Let’s Discuss Retirement Age Increase ).

Also, politicians are eager to close the pension gap between men and women. Women outnumber men as pensioners by two to one, yet receive much lower incomes. Only 13% retire with a state pension in their own right and single women receive on average £36 less a week than men.

Author of the IPPR report, Peter Robinson, said experts agreed that increased life expectancy would make it necessary for people to work longer. “Our research shows that the public are not convinced, and distrust the evidence from employers, the financial services industry and the government, basing their expectations on the experiences of friends and family,” Robinson told the newspaper

The report calls for an increase in the basic state pension. It also urges the government to encourage saving by simplifying the tax system, so pensions are the most tax-favored form of saving.

More information about IPPR report is  here .