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Ex-FSA chair calls for state pension age to rise to 70 by 2040

Former FSA chairman Lord Adair Turner called for the state pension age to rise to 70 by 2040 as he set out a radical pensions agenda which included compulsory saving and support for higher contribution rates of up to 16 per cent.

Lord Turner chaired the Pensions Commission in 2005, a review which paved the way to the current automatic enrolment reforms. 

Speaking at an event held by think tank Policy Exchange in Westminster, Turner set out a radical agenda on charges, super-trusts and much higher contribution rates.

He called for an acceleration of state pension age increases to 70 by 2040. The Government plans to increase the state pension age to 69 in the late 2040s. 

Turner said: “I would have liked to go further in the commission at the time and I suspect we should go further still. I think [age] 70 by 2040 would be a good thing.”

Lord Turner called for changes to pension reform via support for compulsory pensions saving and contribution rates as high as 16 per cent per person.

He said: “When we did auto-enrolment we liked the idea of an opt-out. Maybe there are ways we can make it even more presumptive so you are in unless you can really prove you need to be out.

“If we move to compulsion and higher rates then it is even more important people get good value for money. Fees matter a lot.”

Turner argued compulsory saving would require more economies of scale to keep fees low, and backed moving towards super trusts or a Swedish-style state run scheme.

The Pensions Bill forces the Government to review the state pension age every five years and link it to life expectancy. Chancellor George Osborne has previously said individuals should spend up to one-third of their lives in retirement.

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