Think tank report

‘Use savings from pension age rise to help weak’

pension advice
Phoenix calls for more engagement with those nearing state pension age

Savings that result from raising the state pension age should be reinvested into helping those worst affected, according to a think tank.

Longevity think tank Phoenix Insights, part of Phoenix Group, said the last rise in state pension age saved the Exchequeur  £4.9bn.

It says this uplift in the qualifying age did not simply lead to everyone working for longer, it also led to increases in rates of poverty and unemployment among those impacted.

Phoenix Insights’ new report, Reaching a certain age: Public attitudes to the state pension, warns that “moving the goal posts again” will leave many in a worse position.  Assuming a similar saving from a further rise, it says that reinvesting 10-20%, or £0.5bn-£1bn, would still enable a net gain for the Exchequer of 80-90%, or £3.9bn-£4.4bn.

It says people need to be prepared and supported through the expected transition to a later state pension age – especially those facing health issues, redundancy or caring responsibilities which can make it more difficult to work in the five years leading up to state pension age. These groups are among those most likely to be negatively impacted.

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The report calls for an engagement campaign targeting those who will be affected first by any change, more investment and support for working carers for those reaching state pension age; and a programme of support from mid-life onwards, including “mid-life MOTs”, access to lifelong learning and preventative health at work programmes.

Catherine Foot, director of Phoenix Insights, said: “Nearly half of the population rely on the state pension for the majority of their income later in life; to protect future generations of retirees from poverty, Government needs to act now.

“Reinvesting just a fraction of the money saved by increasing the state pension age can help more people stay in work longer and support those for whom that is simply not feasible.

“We know people worry that health issues, caring responsibilities and having the right skills will prevent them from working for longer – so it’s clear that raising the state pension age without a plan to help people earn or save more is a recipe for disaster.”

Phoenix Insights is a new think tank set up by Phoenix Group, the UK’s largest long-term savings and retirement business, to transform the way society responds to the possibilities of longer lives.

It will use research to lead fresh debate, prompt a national conversation, and identify the action needed to make better longer lives a reality for all.

The core of its work is financial security, learning and skills, and also health and care, homes and communities.

It is chaired by Phoenix CEO Andy Briggs, who is also the UK Government’s Business Champion for Older Workers.

See also: Opperman again refuses meeting with WASPI

One Comment to ‘Use savings from pension age rise to help weak’

  1. There aren’t any savings in raising the SP age. The NI fund is set to be in trouble by early to mid 2030’s. Then the Treasury Grant would have to probably step in.
    The SP is raised because People are living much longer than previously. There used to be 8:1 worker ratio to Pensioner. Now it’s virtually 3:1.
    I do agree that we need Welfare reform especially an introduction of better help for those pre SP age. How that would be funded though I don’t know. I do know though that it won’t be from the NI fund as there’s nothing spare.

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