Higher retirement age on cards: experts

Raising the retirement age - possibly to 67 or 68 - is likely if future Governments stay committed to a universal state pension, say savings industry experts.

"I certainly think increasing the age is one of the options that needs to be considered, particularly if life expectancy continues to increase," said Retirement Commissioner Colin Blair.

But Finance Minister Michael Cullen yesterday ruled out changing the entitlement age to New Zealand Superannuation.

Both men were responding to a Treasury working paper canvassing the benefits of raising the age from 65.

The move would counter the mounting cost of paying for a jump in the retired population in the next 50 years.

The cost of superannuation is expected to rise to more than 8 per cent of gross domestic product by 2050 from about 4 per cent at present.

Healthier and longer-living New Zealanders would mean many working beyond 65, the Treasury said.

But yesterday both Labour and National backed away from the politically sensitive issue.

"Government policy is clear, there will be no change to the age under a Labour Government," Dr Cullen said.

National superannuation spokesman Gerry Brownlee said a National Government would not raise the retirement age "in the foreseeable future".

Both parties agree that superannuation should be available at age 65 and paid out at 65 per cent of the average wage for a married couple and about 40 per cent for a single person.

Dr Cullen said the Government did not commission the Treasury report.

The Council of Trade Unions opposed increasing the retirement age.

But the Investment Savings and Insurance Association, which represents private superannuation and investment companies, said the changing population balance meant that increasing the retirement age had to be considered.

The retirement age would have to rise to about 77 by 2050 to keep the present 26 per cent pensioner ratio - although it did not advocate it.

- NZPA