Overview

As the population ages and people live longer, the minimum retirement age is creeping up. This article – exclusively for Legal Week – examines the implications for pensions as the UK elections approach.

The topic of pensioners is one that is causing much stir in the election campaigns, whether it is the leaflets referred to by David Cameron in the second leaders TV debate or the varying promises by the parties to restore the link between the rate of the basic state pension and earnings.

One thing that looks likely unavoidable in the long term whoever holds power is increasing the state retirement age. Both Labour and the Conservatives mention it in their manifestos and it’s hard to imagine that there is any debate that it’s inevitable – it’s largely a matter of when.

Life may begin at 40 (or is it 50 these days?), but one thing we are all interested in is when we can start to really make the most of it. Sadly, for those not already retired, the answer is probably none too soon. On the plus side, the primary reason for the increase is that people are generally living longer. For an average male aged 65, for example, the estimates of his life expectancy rose steadily the second half of the 20th century from about 14more years to about 20 more years. The current balance of expert opinion suggests that in the next 20 years, that estimate will have risen to 22-24 more years.

So the Government, in various guises, has to encourage people to work for longer in order to maintain the average length of retirement. One thing that has already happened is a rise in the normal minimum pension age (NMPA) – the minimum age at which pension benefits can be taken – for registered pension schemes from 50 to 55. This came into force on 6 April this year.

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