Proposals to increase the state retirement age for men in 2016 have been described as too hasty by the National Association of Pension Funds (NAPF).
In response to the government’s consultation on the plans, NAPF warned that the move would offer too little time for those employees who are close to retirement to prepare for the change.
NAPF also pointed to gender inequality fears as a concern. While the age at which men qualify for a state pension will climb to 66 by 2016, a similar eligibility rule won’t come into effect for women until 2020.
The worry is that many employees approaching retirement may not be able to rearrange their private pensions and savings in order to accommodate the additional year without the back-up of a state pension.
For its part, NAPF has argued for a co-ordinated increase in the pensionable age to 66 for both men and women by 2020, and for a rise in the state pension to £8,000 a year.
Joanne Segers, chief executive of NAPF, conceded that an increase in the state pension age is necessary but added that the government was being “too hasty” in earmarking 2016 as the preferred date for the lift in the case of men.
Ms Segers said: “Many people now in their mid- to late-50s have made quite detailed retirement plans and they may be unable to adjust their savings to cover the state pension they will lose. Those in their 50s who have already retired or who have switched to working part-time will also have a shortfall in income for that lost year.”
She went on to argue that gender discrimination is a big issue in the workplace and that many employers feel uncomfortable about the unequal nature of the current plans.
“The pensionable age should be raised to 66 in 2020 for both men and women,” Ms Segers commented. “That will give people at least ten years to plan.”
NAPF would like to see the government offer employees an improved state pension as a trade-off for working longer.