Think tank urges state pension at 67

The state pension age should rise to 67 between 2020 and 2030, a report from the Institute for Public Policy Research has said.

The study, published on Monday, said the move was necessary if the UK pensions system is to be sustainable and reflect increased life expectancy.

However, ministers said they had "no plans" to raise the state pensions age.

The report also called for the government to do more to persuade the public to postpone retirement.

The IPPR said that working later was the best solution to Britain's looming pensions crisis.

Retirement

People reject delaying retirement because they do not expect to live longer, the report found.

Pensions secretary David Blunkett and the prime minister must convince workers that this was not the case, the IPPR added.

"There is a consensus among pensions experts that increased life expectancy will make it necessary for us to work longer," report author Peter Robinson said.

"Our research shows that the public are not convinced, and distrust the evidence from employers, the financial services industry and government, basing their expectations on the experiences of friends and family.

"This distrust means it is vital that the government achieve its objective of a popular consensus for pension reform."

"Raising the state pension age is vital if the UK pensions system is to remain sustainable and cope with the pressure of an ageing population," he added.

Consensus

Responding to the findings, pensions minister Stephen Timms said the government wanted a consensus on the issue.

"It is an issue we take very seriously, having recently taken many opportunities to go and talk to the public at events designed to engage and educate people on this issue," he said.

"The government has no plans to raise the state pension age but welcome giving people increased choice as they plan for their retirement, for example, voluntarily deferring their state pension for a few years.

"People are healthier and living longer lives, which is obviously good news, but this has other inevitable consequences.

"When the pension system started, there were 10 people in work for every one in retirement.

"Now we have four for one and within the next 50 years we will be down to two to one."

Work-till-you-drop

There was criticism of the report from TUC general secretary Brendan Barber.

"Work-till-you-drop policies of putting up the state pension age will hit the poorest hardest," he said.

"The gap in life expectancy between rich and poor has been growing in recent years.

"Decent pensions from 65 can be afforded if the government meets its target of getting 80 per cent of those of working age into work.

"This report would have been more useful if it had looked at ways of extending real choice, such as countering employer prejudice against employing older people and promoting more flexible routes to retirement through part-time work."