Thursday, May 25, 2006

United Kingdom: Government White Paper on Pension Reform, Raising Retirement Age

The U.K. government has published its response to the report of the Pensions Commission in the form of a White Paper--"Security in retirement: towards a new pensions system", which sets out proposed legislation. Among other things, if passed into law, the state pension age would gradually rise to 68 by 2044. Other highlights include:
  • During the next parliament, the state pension will be made more generous, and future increases will be tied to earnings rather than prices
  • The number of years it takes for people to qualify for a full basic state pension will be cut to just 30
  • From 2012, people will be automatically enrolled into a new, low-cost national savings scheme, albeit with the chance to opt out if it is not suitable for them.
The proposed changes will not affect anyone currently over the age of 47.

In addition to the complete White Paper, online resources include an Executive Summary and Secretary of State for Work and Pensions, John Hutton’s Oral Statement to the House of Commons.

Source: Department for Work and Pensions Press Release (May 25, 2006)

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