In response to the government’s plans to speed up the higher retirement age, the National Association of Pension Funds has claimed that we need more time to deal with the changes.
The previous government had planned to make the state retirement age 66 (up from 65) from 2020, but David Cameron’s government’s emergency budget has speeded that change up to 2016.
However, the NAPF has said that workers simply need longer to factor this change into our retirement planning. Joanne Segars, the NAPF’s Chief Executive, said that many people in their fifties had been planning with retirement in some detail for years, and that it is now too late for them to make any adjustments to take into account an extra year without a pension.
Whilst criticising the speed with which the changes are being implemented, Segars did admit that changes need to be made. To make a state pension sustainable and indeed sustaining for those trying to live off it, Segars conceded that the state pension age does indeed have to rise. However, if the retirement age must rise, then people need to be helped to stay in work for longer.
Dr Ros Altman is an independent researcher and commentator on the pension industry, who offer advice on policy. She is also on the same wavelength as the NAPF when it comes to raising pension ages.
In fact, in order to make the state pension a more meaningful amount, Dr Altman proposes a tiered system where the payments that a retiree may receive are tiered in accordance with their age. Such a system would take into account the gradual reduction in the amount of work that the older person did, until they were entitled to a higher level of pension payments from, say 70 or 75.
