Children born today 'will work to 80' under pension reforms in Britain

Let’s hope Harper is not paying too much attention to the pension reforms in Britain. Let’s hope the scandals he faces today will keep him and his minions away from reading what is happening in Britain. The following was posted on May 09, 2012 and shows how the government there is taking steps to destroy the social contract between it and the people.

The state retirement age will rise in line with life expectancy under plans for a radical overhaul of the pension system. By Robert Winnett, Political Editor

A planned increase in the retirement age to 67 will be brought forward to between 2026 and 2028, after which it will be linked to longevity for future retirees. Children born today may not be able to retire until they are 80.  

A separate piece of legislation was also unveiled which will overhaul the pensions offered to public-sector workers, which will in future be calculated on the basis of “career average” earnings rather than a final salary. The schemes will also become cheaper for the taxpayer. The changes have been bitterly opposed by the trade unions in recent months.

The reforms to the pension system were one of the few radical pieces of legislation to be announced in yesterday’s speech. Successive governments over the past decade have grappled with the problems of the complicated state pension and the increased cost of retirement because of sharp increases in life expectancy.

The Government briefing on the changes said it is “committing to ensuring that the state pension age is increased in future to take into account increases in longevity”.

The measures will run alongside a drive to tackle the pensions savings crisis, which will see up to 10 million people automatically enrolled into workplace schemes from this autumn, starting with larger companies.

John Lawson, head of pension policy at Standard Life, said: “If after 2026 the state pension age increases in line with our changing life expectancy, we could expect that someone who is currently 37 won’t be able to start drawing their state pension until they are 70 and someone who is 21 won’t receive it until they are 75.

“This means that children born in 2012 are unlikely to get their state pension until 80, if life expectancy at retirement rises in line with the last 30 years.”

The simplification of the state pension was welcomed by the National Association of Pension Funds.

Joanne Segars, the association’s chief executive, said: “We are delighted by this confirmation of the Government’s commitment to a long-awaited, landmark reform.

“This is another big step towards a simpler, more generous state pension that no longer penalises people for saving. A new system will take millions out of means-tested benefits and will encourage people to take control of their own age by saving towards it.”

She added: “We are all living longer, so it is inevitable that retirement ages move upwards to reflect that. The trade-off for working longer must be a better state pension come retirement.”