Government rejects call to raise pension age

The
Government has rejected the CBI’s call to raise the state pension age to 70,
but said rules coming into force later in the year will entitle workers to a
bonus if they defer their retirement.

Raising
the retirement age to 70 would hit people on lower incomes, but those deferring
would be eligible for a pension of £120, according to work and pensions
minister Andrew Smith.

The
CBI report on the future of UK pensions called for an extra £20 on the basic
weekly pension and said the rise would help low-paid workers and reduce the
need for any means testing.

The
CBI wants the change introduced between 2020 and 2030, and also urged firms and
staff to put more into company schemes.

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The
CBI plan would see around 7.1 per cent of GDP being spent on pensions by
2050/2051, compared with 6 per cent now.

By Michael Millar