The Government’s pension reforms, including raising the retirement age to 66, will be insufficient to cover the increased costs of pensions in the future, according to the Organisation for Economic Co-operation and Development.
The Government has proposed raising the retirement ages for both men and women to 66 by 2020 and will consider a further acceleration of the previous administration’s plans to raise the state pension age to 68 by 2046.
In a report on the future of pension provision, the OECD says that the average pensionable age in OECD countries will reach 65 for both sexes by 2050.
However, it says life expectancy will outstrip the increase in pension ages by around two years for men and one and a half years for women.
OECD secretary general Angel Gurria says: “Further reforms are needed that are both fisc- ally and socially responsible. We cannot risk a resurgence of old-age poverty in the future.
“This risk is heightened by growing earnings inequality in many countries, which will feed through into greater inequality in retirement.”
National Association of Pension Funds chief executive Joanne Segars says: “Our soc- iety is not saving anywhere near enough for retirement and is storing up some serious problems.
“But the trade-off for working longer must be a better state pension. It needs to become more generous and a lot simpler. The Government must prioritise these reforms.”