Industry figures label proposed SPA increase “shocking” and “brutal”

Pension industry members have labelled Iain Duncan-Smith's think tank's proposal to raise the state pension age (SPA) to 75 by 2035 as “shocking” and “brutal”.

In a report published on Saturday (17 August), the Centre for Social Justice recommended raising the SPA “to improve health and wellbeing, increase retirement savings and ensure the full functioning of public services for all.”

However, the proposal has created a backlash from many senior figures within the industry.

Former Pensions Minister and current life peer, Ros Altmann, described the suggestion as “shocking”.

“This must not be allowed to happen. Using age as a strict cutoff is not good policy,” she added.

Hargreaves Lansdown senior analyst, Nathan Long, said that the proposed increase was “pretty brutal” and that there would need to be changes if it stood a chance of being successful.

He continued: “An age 75 SPA could work if the payout was far higher and workplace pensions could be used to help manage any interim period between work and SPA.”

Age Scotland chief executive, Brian Sloan, agreed: “We would urge caution at accelerating the increases to state pension age. We have already seen the negative impact this has had on the Women Against State Pension Increase women and lessons need to be learnt from this.

“It is also important to consider that whilst some older people choose to work past their state pension age not all are able to do so due to ill health. This would have serious financial implications on older people if they have to wait longer to receive their state pension. 

“Any changes would need to be communicated clearly in order to ensure people are able to plan for their future and are in no way disadvantaged from state pension age increases. "

Royal London pension specialist, Helen Morrissey added: “While such proposals will undoubtedly save money, raising state pension age so quickly will cause huge issues for many retirees who will not have been given adequate time to prepare.

"The government needs to think carefully before taking such drastic action.”

However, condemnation of the suggestion was not universal. Broadstone technical director, David Brooks, tweeted: “I always have struggled with the concept that we’re all due a long period of rest at the end of our working lives.

“It’s a thing society has only recently had and think it will be looked back on as an anomaly.”

There were also other proposals within the report that some believed could bring about positive changes.

Sloan added: “Age Scotland welcomes much of the report by Centre for Social Justice think thank, and agree that employers are missing out by not supporting older workers with career development, health support, and flexible working arrangements.”

Long concurred: "Calling out the importance of communication between employee and employer is very important.

“Experience tells us that employers lack confidence in talking to be people who are older about the prospect of leaving work. Positive changes here could be really beneficial.”

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