The Pensions and Lifetime Savings Association (PLSA) has responded to the calling for no further increase to the age people receive their State Pension.
The PLSA highlighted that the UK is already set to have, at 68, the highest State Pension age of any OECD country. Raising it further would cause unacceptable detriment to two particular groups of people:
- those with lower than average life expectancies, who might only receive very little, if any, State Pension, and
- those with lower than average healthy life expectancies who might struggle to stay in the labour market before the State Pension age.
In its response, the PLSA recommended that the so-called ‘triple lock’ is replaced by indexation in line with earnings so that the state pension maintains its current value of around 30% of average (median) earnings.
Graham Vidler, Director of External Affairs, Pensions and Lifetime Savings Association, said:
“We believe the fairest approach for current and future generations of pensioners is to drop the triple lock and halt further increases in State Pension age.
“A State Pension maintained at 30% of average earnings can provide a strong basis for future retirement incomes. Removing the triple lock can keep it affordable without the need to increase State Pension age still further to the detriment of people with poorer health.
“We also believe that proposals for a variable pension age, while attractive in tackling socio-economic differences, would sacrifice the simplicity and clarity of the current system. On balance, we support the current system of a single State Pension age for all”.
The PLSA also brings attention to the impact changes to the State Pension age will have on some pension schemes, especially those with defined benefit schemes. Many of those schemes still retain links to the State Pension which would be affected in different ways by any changes to the mechanism for calculating the State Pension age.
NOTES TO EDITORS:
We’re the Pensions and Lifetime Savings Association; the national association with a ninety year history of helping pension professionals run better pension schemes. Our members include over 1,300 pension schemes with 20 million members and £1 trillion in assets, and over 400 businesses. They make us the voice for pensions and lifetime savings in Westminster, Whitehall and Brussels.
Our purpose is simple: to help everyone to achieve a better income in retirement. We work to get more money into retirement savings, to get more value out of those savings and to build the confidence and understanding of savers.
Lucy Grubb, Head of Media and PR, Pensions and Lifetime Savings Association
T: 020 7601 1726, M: 07713 073 023, E: [email protected]
Babak Mayamey, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1718, M: 07825 171 446, E: [email protected]
Kathryn Mortimer, Press Officer, Pensions and Lifetime Savings Association
T: 020 7601 1748, M: 07901 007 713, E: [email protected]