PwC report recommends phased state pension age increases

02 March 2010

The state pension age should undergo a phased increase and reach 70 by 2046, a new report from PricewaterhouseCoopers (PwC) has recommended.

If this is implemented, the study said, the Treasury could benefit from an additional £9 billion.

This fiscal benefit would be equivalent to an almost two pence rise in the basic rate of income tax or a two percentage point rise on the standard rate of VAT.

Pensions Week deputy editor Charlie Kirby agreed that increasing the state pension age may help the Treasury in its efforts to reduce public sector net debt.

"Calculations by Pensions Week using figures from the report estimate as much as £130 billion could be saved by 2050 by increasing the SPA to 70 by 2046," she commented.

Ms Kirby went on to say that pension providers are attempting to find ways to make occupational pensions "more flexible", but this has proved difficult because of the current pensions legislation.

The UK state pension age currently stands at 65 for men and 60 for women.

Worries about enforced retirement could lead a number of people to seek out alternative retirement funding methods such as equity release schemes.