EUROPE/UK - Overly-generous occupational pension schemes are encouraging workers to take early retirement, the Organisation for Economic Cooperation and Development says.
Its latest report – which sets out an agenda for dealing with problems such as labour shortages and ageing populations – states: “There are pathways to withdraw from the labour market at a relatively early age, in particular by using special early retirement schemes, unemployment-related transfer schemes, disability pensions and occupational pensions.”
The OECD said that while occupational pension schemes have been tightened, they still provide important fiscal incentives to retire before the statutory retirement age.
It calls for an increase in the standard retirement age but acknowledges that increasing the retirement age for women in the UK is a positive step.
Today’s average retirement age for UK workers of 62 is unchanged for the last 20 years, according to OECD research.
Females can expect to live a greater number of years in poor health than males, according to data from the Office for National Statistics (ONS) for 2015 to 2017.
Scottish higher-rate taxpayers will benefit from more pensions tax relief than workers on the same salary anywhere else in the UK as income tax bands continue to diverge.
Schemes risk breaking the law and being forced to wind up as The Pensions Regulator (TPR) warns some may be master trusts but do not know so.
As a hectic 2018 draws to an end, Jonathan Stapleton wishes readers a quieter 2019.