The current retirement age of 65 is under review as according to the Work and Pensions Secretary, Ian Duncan Smith, most workers want to work on when they reach 65. The new proposals suggest the retirement age could be pushed beyond 70.
Mr Duncan Smith insists that higher life expectancy means people should, and usually want, to work for longer before taking their pensions. However, critics have opposed the idea claiming that retiring at 65 is not financially viable so they are forced to work past potential retirement.
Critics are backed by Ros Altmann of Saga who claims the research shows most over 50s want to retire as soon as it is practical. Suggesting further that increasing the state pension age too quickly will have terrible consequences. Labour MP Stephen Pound believes that forcing people to work on indefinitely condemns young unemployed people to the dole and destroys the life chances of older people who have spent 30 or 40 years working for a productive retirement.
Despite the government reviewing retirement plans, with the understanding that people can and need to work longer, it is also up to individuals to save for retirement. Research conducted by Scottish Widows shows that 40% of those aged 45 to 54 are not saving at all. If people wish to retire at the minimum age then they have to accept the responsibility of saving.
In addition to reviewing the retirement age Ian Duncan Smith has signalled that ministers have approved plans to scrap means-tested pensions and bring in a flat rate state pension worth £155 a week. This change, to take effect between 2015 and 2016, is designed to ensure that it always pays to save for a pension rather than rely on means-tested benefits later in life.
Meanwhile, to meet the demands of an aging population, Ministers are examining a formulae to automatically increase the pension age as life expectancy goes up, making retirement a moving target.