Retirement age should rise above 65, warns IMF

The retirement age must be raised above 65 and the NHS should start charging for services to keep the UK’s soaring debt under control, the International Monetary Fund (IMF) has urged.

The global watchdog said fundamental changes to public sector spending were vital to “help keep a lid on the debt”, the Daily Mail has reported.

Yesterday the Civil Service announced it had scrapped its retirment age for all staff, and experts predict the government will abolish the default retirement age when a review takes place next year.

But the IMF said that a radical reform of pensions, leading to a rise in the national retirement age from 65, would save billions of pounds.

The budget deficit is expected to rise to £200bn this year, £25bn more than the chancellor predicted in the Budget, according to the Mail.

The IMF estimated that by next year Britain’s debt would represent 81.7% of output. Even with planned cuts and tax increases, it predicted a figure of 98.3% by 2014.

Asked about the growing size of the UK’s budget deficit at a press conference, Olivier Blanchard, the IMF’s economic counsellor, said: “[The government] has to take measures which improve the medium-term sustainability of the debt. That means reforms of the retirement system; that means reforms of the healthcare system. These reforms have to be confronted. The idea of just [introducing] fiscal rules and not these reforms is a joke.”

In its six-monthly World Economic Outlook, the IMF said that the world recession was now over, with the global economy expanding again.

However, it added that the pace of recovery would be slow, particularly as the number of people unemployed is due to reach three million by early next year.

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