Adair Turner told those attending a Manchester, England pension conference that as officials ponder the best responses to the nation’s pension woes, the idea of raising the retirement age “has to be on the table,” according to a Dow Jones report.
At the same time, however, Turner said he would be wary of any rapid rise of the UK retirement age, such as putting it up from the current age of 65 to 70 by 2030. “A rapid across the board increase to 70 by 2030 is too crude,” Turner said, according to Dow Jones.
Turner said that the while the two-year-old commission didn’t yet have specific solutions, it is clear that the present system “is not fit for its purpose.” He said the commission would deliver its final report this autumn, by November 30.
Turner described the country’s pension system as a “muddle, which few people understand” and asserted that the UK had the choice of turning the system either into a more understandable compulsory program or integrating it into a more generous basic state pension system.
He said the commission was discussing a spectrum of ideas, including whether the government should do more to compel people to save for their retirements or to encourage voluntary saving.
Turner said that while the UK didn’t face the same “collapsing” savings rate seen in the US currently, he said that as a result of the commission’s work “we would prefer that aggregate national savings increased rather than decreased.”
The future of UK pensions has risen to the top of the political agenda since the country’s general election last week. According to the Association of British Insurers, there is an annual gap of GBP27 billion between what Britons are now saving and what will be needed to fund their retirements, according to Dow Jones.
Prime Minister Tony Blair has appointed one of the country’s most high-profile politicians, David Blunkett, to take charge of government policy. He is expected to formulate the government’s response to the pensions problem after the Turner commission reports in November, the news report said.