PLSA IC 19: Retirement age must increase further to meet support ratio

The retirement age in the UK would need to increase to 70 by 2030 to keep the 'stable support ratio' recorded in 2010 at the same level, according to Border to Coast Pensions Partnership CIO, Daniel Booth.

Speaking at the Pensions and Lifetime Savings Association's 2019 Investment Conference, Booth explained that the retirement age in the UK would have to increase at a faster rate than the government has planned.

He stated: “For the UK to sustain the support ratio at 2010 levels, we can see that it [the retirement age] will need to be up to 70 by 2030.”

The government currently plans to increase the retirement age from 66 to 67 between 2026 and 2028, although this could have to happen earlier or increase sharply afterwards to keep the support ratio at 2010's level,

The UK had a support ratio of four in 2010, meaning that there were four people aged 15-64 per one person aged 65 or older.

People of working age were expected to be able to provide the necessary support for pensioners, although Booth claimed that the ageing population could force the retirement age to increase.

He continued: “These longer-term demographics are going to be a big challenge for us.

“Debt and demographics are big features that will play for a long time going forward. So highly indebted societies with ageing workforces [are a concern].”

Border to Coast Pensions Partnership's analysis also found that to keep the support ratio at 2010's levels, the retirement age would have to increase to 75 by 2070.

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