UK pension age 'should rise'

LONDON - The British government should pay a higher state pension in return for workers retiring later, a long-awaited commission on pension reform will recommend, according to the Financial Times.


The commission, set up to create a blueprint for reforming Britain's creaking pension system, will say the age at which workers can draw the full state pension should be raised to 67 from 65, the paper said.


In return, a more generous pension should be paid, nearer the £109 ($276) a week that is today's means-tested minimum income guarantee, rather than the basic state pension's £80 a week.


It should rise in line with average earnings rather than with prices, which tend not to go up as fast.


The paper said this would add billions of pounds to taxation and public spending by 2050, but the later retirement age would go some way to offsetting the cost.


The report from former Confederation of British Industry chief Lord Turner is due at the end of the month.


The paper said it would propose a new national pensions savings plan into which people would be automatically enrolled, although they could opt out.


British men currently collect their state pension at the age of 65 and women can do so at 60, although the qualifying age for women will rise to 65 by 2020.


State and private sector pension systems in many countries are under strain from demographic changes. As people live longer, an increasing number of retirees are being supported by fewer people of working age.


- REUTERS