UK - An Increase in the UK state retirement age from 2020 is "inevitable" according to the secretary of state for work and pensions, John Hutton.
Hutton’s comments come as a strong endorsement to the pension reform proposals made in Lord Turner’s Pensions Commission released last year which stipulated the clear need to increase the pension age before 2045.
Turner previously emphasised that between 2020 and 2045 an increase in both pension expenditure and state pension age would be needed to ensure an adequate, largely non-means tested system.
However Hutton noted that raising the age must be considered alongside with social issues relating to health and education policies.
“There is strong evidence that differences in life expectancy are driven by differences in health and education. We’re already working towards a significant reduction in mortality rates by 2010 and a reduction of at least 10% in the gap between the fifth of areas with the lowest life expectancy at birth and the population as a whole.”
Hutton, who claimed the UK could not remain “immune” to this “truly global phenomenon” of pension reform, cited the US, Japan, Austria, Slovakia and the Czech Republic as examples of where state retirement has been increased. The US, for instance, plan to increase the age to 67 by 2027.
Philip Hammond, Conservatives’ shadow work and pensions secretary, said Hutton would need the backing of Chancellor Gordon Brown. “The Chancellor has suggested that the £10bn a year saving from the equalisation of the women’s pension age may not be available to finance more generous state pensions,” he said. “This would certainly risk undermining John Hutton’s assertions.”
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