Retirement Age (Hansard, 24 March 2004)

§ Malcolm Wicks

There is no statutory retirement age in the UK, in the sense of an age at which legislation requires a person to retire.

The state pension age is currently 65 for men and 60 for women but will increase gradually from 60 to 65 between 2010 and 2020 to allow employees and employers as well as companies running pension schemes time to plan for and implement the changes.

We have signalled our intention to maintain the state pension age at 65 (there is a consensus that people should have the right to work longer but that this should be voluntary and not forced). However, both Private and State Pension systems allow individuals to work past this age and accrue higher pensions.

Proposals in the Pensions Bill will allow individuals to receive better rewards for deferring their state pension in the form of a lump sum payment or increased pension when an individual eventually retires.

The minimum age at which tax privileged retirement benefits can be drawn from a private pension scheme will be raised to 55 years by 2010. It is possible to retire earlier in exchange for an actuarial reduction of private pension. The actual amounts are dependant on the type of pension scheme am when the employee retires. It is a requirement of tax legislation that schemes should have a normal pension age reflecting the age at which individuals would usually withdraw their pension.

We are proposing to raise the age at which public sector employees can draw an unreduced pension from 60 to 65. This age would apply regardless of the employee's length of service but certain occupations where the physical capacity of the job justify the award of a normal pension at a lower age will continue.