Experts Warn of Rising Retirement Age to 71 – Pension Crisis Update

The recent suggestion of pushing the age of eligibility for the UK state pension to 71 has ignited an uproar. The Labour Government has been advised by experts to take immediate action concerning the unsustainable state pension payment obligations. The heated argument has even fuelled talks of potential civil unrest if the pension age is raised any further.

The Chancellor, Rachel Reeves, is currently under immense scrutiny to raise tax thresholds, as those relying on the state pension may soon be subject to income tax. Furthermore, a think tank proposed that the current pension age of 66 should escalate to 70 or 71 by 2050 to maintain its affordability.

Andrew Oxlade, Director at Fidelity International investment fund managers, warns that such a measure could stir civil unrest. As seen in various incidences worldwide, such as the violent pensions protests in France and the Russian protests of 2018. In 2023, France was rocked by demonstrations against controversial reform laws that lifted the retirement age from 62 to 64. Similarly, drastic changes to pension guidelines led to turmoil in Russia.

Mr Oxlade stated that the decision to expedite pension age hikes in the UK was delayed because of electoral timing. Still, he emphasized that it’s imminent to address this matter quickly.

The number of ‘baby boomers’ reaching retirement age and the triple lock State Pension payments have further magnified financial strain, according to Oxlade. One viable option to curb the soaring pension cost is to slow down the increase in state pension, possibly even eliminating the triple lock altogether!

Another alternative could be to enhance the State Pension eligibility age. “Numerous think-tanks have cautioned against the growing unaffordability of the State Pension,” said Mr Oxlade.”

The most recent warning came from the International Longevity Centre, suggesting the pension age needs to be raised to 70 or 71 by 2050 for it to remain sustainable.

Reaction to this news among Herald readers was swift and angry. Predictably, there were concerns about the physical and mental toll on people expected to work until 71, concerns about the UK having one of the highest state pension ages globally and even fears of substitute measures, such as means testing the pension, coming into effect.

Readers voiced their suspicion that individuals with private or company pensions would be the first to be targeted, and worries about moving towards a two-tier healthcare model, like the United States. Some humorous remarks were made to highlight the government’s desperation to cut costs, yet one reader noted that pensioners were frequently seen as a drain on the national economy, causing resentment amongst the younger, working population.

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