|June 10, 2006
Great Britain to raise age of Retirement
|The British government recently released a plan to raise the retirement age on a gradual basis to age 68 and link benefits with
earnings. Under the plan, the retirement age will be raised from age 65 to 66 in 2024; to age 67 in 2034, and to age 68 in 2044. The
government also plans to restore the link between state pensions and people's earnings by 2012, if financial conditions allow it.
Former British Prime Minister and Conservative, Margaret Thatcher, removed the link in 1980, saying that the British Pension System
was too expensive.
"I believe [the plan] can lay the foundation for a new and lasting consensus on a long-term solution of the pensions challenge we face
as a country," Work and Pensions Secretary John Hutton told the House of Commons. The changes are based on recommendations
that were made by a panel appointed by Prime Minister Tony Blair in 2002.
The panel warned in their report that by the year 2050, the number of pensioners in Great Britain will increase by “50 per cent,” and
that roughly 10 million people aren't saving enough money to properly retire.
A number of European countries have already raised or are planning to raise the age of retirement. Italy has raised its retirement age
from 57 to age 60, Belgium will raise theirs from 58 to 60, while Germany plans to raise their retirement age from 65 to age 67. The
United States is gradually raising its retirement age to 67.