Why 500,000 Scots fear new move to solve the age-old pensions problem
huge disparities. Life expectancy improvements among all but the better-off households have more or less stalled this decade, with many putting the blame on Government austerity measures.”
Analysis by Hymans Robertson found the state pension age would be 74 if it had kept pace with longevity changes and, while Mr Hatchett said people should “not be dropping down dead in the workplace” any more, he supported moves to raise the state pension age sooner.
His comments come as Hymans Robertson held a special summit on the longevity challenge in London this week.
Experts speaking at the event agreed there was little chance of the Government reversing the changes made to the state pension, with younger workers instead having to save far more into their pension than was necessary in years gone by.
Tom McPhail, of financial firm Hargreaves Lansdown, said: “The message for people saving today is: ‘Look, you’re going to get £8,300 a year from the state and if you want more, you’re going to have to save for it… but everybody gets the same deal.’
“That makes communicating around private savings far simpler than trying to finesse that and come up with different systems for different geographical locations, lifestyles or wealth.
“If you means-test [the state pension], not only does it get more complicated but if you’re not careful, you end up actively dis-incentivising people from saving. The Government has come up with this magic dial it can keep turning so that if you just keep raising the state pension you’re dealing with how you make state pensions affordable.
“We’re spending five to six per cent of GDP [on state pensions] and, broadly, we’re going to stay there.”
Others have called for more flexibility to be built into the system to iron out inequality.
Ben Franklin, from the International Longevity Institute, told the conference: “Too often, politicians have suggested we should move to flexible working once we retire, but the reality is that for lots of people in low-paying jobs, they just can’t afford to do that.”
The ILC will publish research later this month suggesting how the Government can help those with ill health or disabilities access the state pension sooner.