UK - The National Association of Pension Funds (NAPF) has called for the retirement age not to increase before the end of the decade, warning that a rise to 66 by 2016 would be “too hasty”.

The organisation said some future pensioners affected by the increase might already be in early retirement and be unable to change their private pension arrangements to compensate for the loss of a year’s state pension.

Joanne Segars, chief executive of the NAPF, said: “Retirement ages do need to go up, but the government is being too hasty.

“Lifting the state pension age for men to 66 by 2016, or even earlier, is simply asking too much.”

The NAPF also said there should be no difference between retirement ages for women and men, which would run the risk of creating a system of gender inequality.

Segars added: “Gender discrimination is a big issue in the workplace, and many employers feel very uncomfortable about the unequal nature of the current plans.

“The pensionable age should be raised to 66 in 2020 for both men and women.

“That will give people at least 10 years to plan and will protect people in their mid and late 50s.”

She again made an appeal for the implementation of the NAPF’s foundation pension, which would see the basic state pension and state second pension combined to offer around £8,000 a year to retirees.

However, figures by the Pensions Policy Institute previously suggested the move could cost the government around £25bn a year if implemented from 2017.

The NAPF’s plea comes as Mercer revealed that the life expectancy of future pensioners had increased by seven months in the last year.

However, Ian Hammond, managing director at Rowanmoor Pensions, warned that people were divided on whether actuarial assumptions on longevity were correct.

“Some argue that future longevity improvement is being overstated in the models, and we may even see a decline in the future due to increasing levels of obesity, diabetes and infectious diseases.

“Others argue that, due to future medical advances, longevity could continue to improve at an increasing rate and that further increases in pension liabilities could therefore be expected.”

Hammond said final salary schemes would continue to carry the risk of increasing longevity and that companies would see it reflected on their balance sheets.
 

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