Benefits June 23, 2004

U.K. Pension Advisor: Make Retirement Age Higher than 65

June 23, 2004 (PLANSPONSOR.com) - The British government's chief independent pension advisory body has jumped into the fray over a compulsory retirement age with statements that it should be significantly higher than 65 or there shouldn't be any at all.
Reported by

Adair Turner, chairman of the government- appointed Pensions Commission, said commissioners felt that way because of a longer life expectancy and a big savings gap, which means people need to either save more or work longer to make sure their income was sufficient, the Financial Times reported. To set a default retirement age, Turner said, “would send the wrong signal to society when we should be removing barriers to longer working lives.”

Turner told the Times that the three-member commission had written to government ministers saying: “Either there should be no default age set at all or that, if one is set, it should be significantly higher than the current male state pension age of 65. It should be 70 or something like that.” The Confederation of British Industry, which represents many employers, has come out in favor of retaining 65 as a default retirement age.

“That (proposal for no default retirement age) is attractive because more people should be going through a flexible decade of retirement where they move from full-time to part-time work, and where they mix a flow of work and retirement income,” Turner said.

Ministers are consulting on whether employers should be allowed to set a cutoff retirement date when European laws banning age discrimination take effect.

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