Increase retirement age to align with longer lifespans argue executives
The state pension age is currently under review by Work and Pensions Secretary Liz Kendall, as concerns over spiralling costs and improved life expectancy mount. The current state pension age in the UK is 66, set to rise to 67 between 2026 and 2028, and there are suggestions of a further increase to 68 in the mid-2030s.
A poll by the Chartered Management Institute found that about half of managers aged 55 or over agree a rise is necessary, with many believing the state retirement age should be raised to reflect improving life expectancy. Among younger managers, 33% support the reform.
Ann Francke, CMI boss, stated that getting the state retirement age right is essential to unlock productivity and future-proof the economy. She also emphasised the importance of valuing the experience of those asked to work longer and supporting them.
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The potential impact of increasing the retirement age includes reduced immediate pension costs, encouragement of longer workforce participation, challenges for older workers, effect on individual retirement planning, and potential policy updates. While it helps improve pension sustainability, it involves trade-offs affecting individuals’ retirement timing and work longevity.
In the US, the full retirement age (FRA) for Social Security benefits will rise to 67 for people born in 1960 or later starting in 2026, completing a decades-long gradual increase from 65 to 67. This change was legislated to reflect improved life expectancy and to reduce financial strain on the Social Security system.
In conclusion, raising the retirement age is a widely adopted policy response to the financial pressures from aging populations and longevity improvements. Governments are actively reviewing and adjusting these ages to balance economic and social factors. It is crucial for individuals to plan and adjust their retirement timing expectations accordingly.
- Investing in a retirement plan becomes more crucial as the Work and Pensions Secretary Liz Kendall reviews the state pension age, with suggestions of it rising to 68 in the mid-2030s.
- Personal finance management becomes essential in light of the potential impact of increasing the retirement age, including reduced immediate pension costs, effects on individual retirement planning, and potential policy updates.
- In the field of wealth-management, platforms like AJ Bell, Interactive investor, Hargreaves Lansdown, Trading 212, and InvestEngine can help individuals compare the best investing accounts and plan for their retirement.
- Politics and policy-and-legislation in both the UK and the US reflect the widely adopted response to the financial pressures from aging populations and longevity improvements, with the full retirement age (FRA) for Social Security benefits also rising in the US starting in 2026.
