The UK’s debt problems could see the retirement age pushed up to 70, a new report by PriceWaterhouseCoopers (PWC) has suggested.
Poor public finances and an ageing, longer living, population will be to blame for the rise in the state pension age the report by one of the UK’s leading consultancies said.
The government already has plans in place to increase the state retirement age, in three stages, from age 65 to age 68 by 2046 but given the large increase in national debt and the effects of the recession, PWC have said this will not be enough.
The chief economist at PWC, John Hawksworth, said that the government should offer a deal to the public that would involve working for longer, with the guarantee that pensions would rise in line with average earnings in the UK.
"The sweet spot enjoyed by the economy during the past 30 years as the post-war baby boomers moved through the workforce has the potential to turn sour as longer periods of retirement leave a lasting and expensive burden on future generations of workers" he said.
Mr. Hawksworth added that the government would still need to increase the state retirement age to 70 in order to guarantee this.
Mr. Hawksworth continued: “Either taxes will have to rise or other policies need to adjust to deal with the higher costs of state pensions, health and long-term care, as well as the large debt hangover from the global financial crisis."
The economist argued that the government’s current plans to increase the retirement age did not go far enough in covering the rising costs of retirement.
The Living Longer, Working Better report said that the increase in the retirement age would raise £9bn a year, at today’s prices, towards covering the costs of retirement
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