The state pension age should be increased to 75 in order to boost the economy by £182bn, says a centre-right think tank which is close to the Government.
The Centre for Social Justice, which is chaired by the former Secretary of State for Work and Pensions Iain Duncan Smith (known as IDS), calls for a ‘reconceptualization of what ageing and old age means’.
Their new report, entitled Ageing Confidently – Supporting an Ageing Workforce, argues that people live longer today and yet the state pension age is roughly the same as it was 100 years ago.
The report recommends increasing the retirement age to 70 by 2028 and to 75 by 2035.
It says that boosting employment rates among older people would reduce the cost of benefits and boost GDP by approximately 9% (£182bn).
The cost of the UK state pension system in 2018 was 42% of the total welfare spend – £92bn. This is an increase of £75bn in a thirty-year period.
The Department for Work and Pensions currently spends £7bn a year on out of work benefits for those above the age of 50.
‘Working longer has the potential to improve health and wellbeing, increase retirement savings and ensure the full functioning of public services for all,’ said Andy Cook, chief executive of the CSJ.
‘Right now, we are not doing enough to help older people stay in work and the state pension age doesn’t even closely reflect healthy working life expectancy.
‘All generations deserve to be supported in their choices and the current lack of support for older members of the UK workforce is both socially inexcusable and economically short sighted.
‘By increasing the State Pension Age, we can help people stay in gainful and life enhancing employment while also making a sound long term financial decision.’
The Shadow Secretary of State for Education Angela Rayner criticised the proposal on Twitter as ‘completely outrageous’.