Call to raise retirement age to 70 (From Bridgwater Mercury)

Call to raise retirement age to 70

10:41am Monday 19th October 2009 in

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WORKERS in the South-West would not be able to retire until the age of 70 if the Institute of Directors had their way.

The IoD has launched a major new report into pensions called ‘Roadmap for Retirement Reform 2009’, which sets out a ‘radical reform agenda, and direction of travel, for both the state and private retirement benefit systems’.

It argues a hollistic approach is essential for effective change designed to deliver better outcomes for consumers, better understanding and better engagement in long term saving.

The paper proposes 4 fundamental changes: * In the face of greatly increased longevity, the state pension age should rise to 70 as soon as reasonably practical * The State second pension should be abolished, together with most means tested state retirement benefits * The savings made should be diverted to the provision of a universal Basic State Pension probably above the level we see today topped up by Pension Credit * The current private pension saving regime does not meet 21st Century needs and should be replaced.

Graeme Leach, chief economist at the IoD, said: “Radical simplification is needed. Startling increases in longevity in recent decades also mean that it is unrealistic to expect to be able to fund a potential 25 to 30 year retirement from an effective 30 to 35 year working life.

“New approaches are needed to recognise this reality. The whole area of retirement needs to be looked at holistically, including how we fund the care needs which will come with increasing longevity. We need a state and private retirement system fit for the 21st Century. This is a policy journey which needs to begin now.”