Why 500,000 Scots fear new move to solve the age-old pen­sions prob­lem

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IONA BAIN

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.

Pic­ture: Rus­sell Cheyne

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