22nd May 2016
Lord Turner has put forward new proposals to raise the state pension age to 70 years old, but with some in manual occupations still getting the pension five years earlier at the current 65 subject to means-testing.
The call will prove controversial given the campaigns against the Government’s plans to equalise the retirement age for men and women by raising it.
The age at which you can take your state pension, is currently dependent on gender, and date of birth, but will equalised for both sexes to 65 by 2018, then rise to 66 by 2020, then 67 by 2028 with an expected subsequent rise to 68.
Now Adair Turner, the architect of the current state pension reforms and the former chair of the watchdog Financial Conduct Authority, wants this to rise to 70 for most retirees.
He also wants what might loosely be called white collar pensioners have to wait longer than those on lower incomes or in manual jobs – giving that these groups do not live as long on average.
However entitlement to an earlier state pension would be means-tested.
Lord Turner has said he would meet former CBI John Cridland, who is advising the government on the state pension age.
Turner said: “I would make the state pension more generous at 70 and, in addition, I would introduce forms of state pension or means-tested benefit, which would be available for lower-income people who’ve retired from 65 or 66 onwards.”
Hargreaves Lansdown head of retirement policy Tom McPhail says: “The state pension is a blunt instrument, which makes no allowance for people’s wealth or their life expectancy. However any deviation from the current state pension entitlement calculation based on a simple NI contribution history to one based on individual circumstances, could be both complicated and contentious.”
“Radical options, including medical underwriting, means testing, or using the state pension as a long stop for when someone has exhausted their private savings are all possible. The government will no doubt be mindful that it is very difficult to introduce any reform in this area of public policy without upsetting some voters.”