| Turner wants graduates to work until they are 70! |
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Adair Turner, head of the government’s Pensions Commission, wants to increase the retirement age of university graduates to 70. Mr. Turner said that the professionals could afford such a step since they had more cash on hand and an increased life expectancy than lower-paid workers. He added that these lower-paid workers could still retire on a full pension at 65 years of age.
Mr. Turner, who has the unenviable task of reforming the pensions system for the government, said, "One of the sad facts is that, although life expectancy is going up, it is going up least in lower socio-economic groups. Various people have proposed that we should increase the state pension age..., which is undoubtedly the direction that we will in the long-term have to look towards. But we would do that in a way sensitive to the fact that some people don't enjoy the same increases in life expectancy." He added that a person who started work at 16 was eligible to retire at 65, but "the person who went to university and started serious work at 23 is not going to get it until 70."
Mr. Turner is considering implementing this scheme to cover up an estimated shortfall of about £30 - £60 billion in the amount people have saved towards their retirement.
Former Labour pensions minister Frank Field has agreed with Mr. Turner's views and said that graduates should indeed work longer. "You can achieve his objective by saying there is X number of years that you have to contribute to the pension before you can draw it. So those that don't go on to university and go straight from school into work will clearly have got their contribution years completed before those of us who went on to university and started much later," he said.
Gordon Lishman, director-general of Age Concern was less than enthusiastic about Mr. Turner's plan, " By failing to scrap mandatory retirement ages in the workplace however, the Government has already fallen at the first hurdle. Making workers who are forced out of employment at 65 wait until 70 for their state pension could have devastating consequences. The Government must abolish mandatory retirement ages so that people have the option to work longer and defer their state pension if they want to, " he said.
Richard Wilson, senior policy officer at Help the Aged called for greater flexibility in the scheme, "Increased life expectancy means that many employees will remain economically productive for longer. Therefore a much larger degree of flexibility in retirement ages is urgently required – mandatory retirement ages are well past their sell-by date. Consideration of flexibility in retirement and a simpler pensions savings system should be Turner’s top priorities," he commented.
David Laws, the Liberal Democrat spokesman for pensions, was critical of Gordon Brown's handling of the pensions' crisis, "The Chancellor appears in no hurry to dismantle the means-tested mess of a pensions system ... forcing the country to endure the current crisis for some years to come," he averred. However, Mr. Brown dismissed these claims and said, "Tony Blair and I ...thought that if there were the sort of changes that some people have talked about that would require another period of consultation that may lead into the next parliament."
Posted
on : Mon, 23 May 2005 11:10 GMT | Pensions News
By : Pippa Fielding
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