A bill on pensions that will examine increases in the state pension age was one of the new pieces of legislation heralded this week in the Queen's Speech. Such a measure was expected, given it was already flagged up in the Conservative and Liberal Democrat manifestos and, most significantly, in the draft coalition agreement.
Indeed, this particular measure should be one of the less controversial to pass through parliament, suggested Robin Ellison, a partner at law firm Pinsent Masons. The main reason for this is that all three main political parties accepted that this was going to have to happen.
Furthermore, Mr Ellison noted, women are already due to see their retirement age rise as it is brought into line with that of men between now and 2022, while the reality of a situation where the average longevity for a British resident increases by three months each year means that the current arrangements will not stand the test of time.
He commented: "The retirement age has got to rise; the only question is how far and how fast? Most people within the industry reckon it is going to be age 70 within the next ten years. This is just the start of a series of changes." These changes, the partner suggested, will see the age eventually increase by "four or five years at least".
The situation is no different on the continent, Mr Ellison suggested, noting that the "consensus" in Europe is that the pensionable age will rise to 70 all over the continent.
When it was published this week, the Pensions and Savings bill stated that its main aim was "to help ensure the future affordability of the state pension, including the restoration of the link between earnings and the basic state pension".
For those keen on saving for the future and retiring earlier, that could mean planning for a future in which any retirement before the age of 70 could leave them with no income from the state, making private planning all the more important.
|