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Government pension plans ‘too hasty’

Government pension plans ‘too hasty’

Category: Pensions

Updated: 06/08/2010
First Published: 06/08/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Government plans to increase the state pension age for men to 66 by 2016 have been labelled 'too hasty.'

The National Association of Pension Funds (NAPF) has warned that the plans unveiled by the coalition Government will not give many of those affected sufficient time to prepare for the change.

The increase of the state pension age to 66 for men by 2016 was a cornerstone of revamped public policy, with savings made by the move earmarked to pay down some of the vast budget deficit.

While the plans have not been officially rubber-stamped, it still remains the likely outcome, with women seeing their state pension age rise to 66 by 2020.

However, NAPF has said that many people in their mid to late fifties who have already made retirement plans may be unable to change their savings and private pensions to cover the loss of a year's state pension.

Many people approaching the state retirement age have already retired or switched to part-time hours.

NAPF has recommended that the pension age should rise to 66 in 2020 for men and women, giving everyone ten years to prepare.

"Many people now in their mid to late 50s have made quite detailed retirement plans, and they may be unable to recalibrate their savings to cover the state pension they will lose. Six years is not enough," commented Joanne Segars, NAPF chief executive.

"The Government's proposals mean that men will face the higher retirement age of 66 some four years earlier than women.

"Gender discrimination is a big issue in the workplace and many employers feel very
uncomfortable about the unequal nature of the current plans. The pensionable age should be raised to 66 in 2020 for both men and women. That will give people at least ten years to plan, and will protect people in their mid and late 50s.

"The trade-off for working longer should be a better state pension - the UK has one of the worst in Europe, and we think it can rise to £8,000 a year. More also needs to be done to help older people stay in work for longer."

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