The squeeze on pensions
- 24 June 2010
- From the section Business
The coalition government is reviewing what to do about state pensions. The favoured option is for further increases in the state pension age for men to 66 from 2016, eight years earlier than the previous Labour government had planned.
Already underway are rises in the state pension age for women, from 60 to 66.
This is needed, says the government, to help reduce the UK's national debt.
Currently, there are more than 12m pensioners in the UK - with many more women than men in retirement.
The move by politicians to raise the state pension age comes not only amid difficult financial conditions, but also as the UK population ages, putting increased pressure on government resources.
However, the UK is not alone. The world's population is also growing older and many other countries are facing similar problems.
The ageing UK population means there will be many more pensioners to support. In 2001, the government's Actuary Department calculated there were 3.32 people of working age to support every state pensioner.
By 2060, it says the ratio will have fallen to 2.44 people of working age for every one state pensioner. In other words, there will be fewer working people contributing towards the system that finances the state pension.
An increase in the starting age for drawing the state pension will mean the amount of time spent in retirement, as well as government expenditure, will be reduced.
You can find out more about pensions on the Directgov site.