Duncan Smith calls for talks on dealing with rises in state pension age

8 July 2010 | By Nicole Blackmore

Last month, Chancellor George Osborne said the increase in the state pension age to 66 will be accelerated and the default retirement age will be phased out from from April next year.

Speaking at thinktank Reform’s Reforming Welfare event last week, Duncan Smith said age 66 is the starting point for the debate.

He said: “At present, under the last Government, there are plans in place already to raise the state pension age to 68 by 2046.

“What I want is a debate about how that should start and how fast society is prepared to accept the need to raise the state pension age.

Duncan Smith calls for ’serious debate’ on the economic effects of increasing longevity

“Bearing in mind that when the original pension age of 65 was set for men around 1940, most men’s expectation for life was that they would live another six or seven years. Now you can look forward to living almost a third of your life in retirement as things stand right now.

“If we want to be fair to the next generation of taxpayers and be realistic about increasing longevity, then we need a serious debate about this and I encourage us to engage in that.”

Duncan Smith said Treasury figures show that working a single year beyond the current state pension age can increase retirement salary by up to 10 per cent. He said if the whole country worked for a year beyond SPA it would increase GDP by about 1 per cent.

Hargreaves Lansdown pensions analyst Laith Khalaf says: “The pension revolution is coming and workers and employers need to prepare for it.”

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