Pensions expert predicts work 'till you're 70 era

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The Independent Online

The state pension retirement age could be heading towards 70 as more people live longer, the country's pension supremo warned today.



David Norgrove, who is chairman of The Pensions Regulator, said people would "undoubtedly" have to work even longer to make ends meet in their old age.



Lord Turner published a report into the future of Britain's pensions system which called for the state retirement age to rise to 68 by 2044. It is currently 60 for women and 65 for men.



Asked what the likely retirement age could end up being, Mr Norgrove told the BBC: "Given recent legislation is increasing the retirement age progressively to 68...I think it will end up higher than that.



"People are going to have to work longer. We as a nation are not going to save as much for retirement as we did in the past."



He said there was a lack of knowledge among the public about how to save, meaning the ability of the current working generation to pay for the retirement of the previous would be "a real issue for the next 30 years".



"The evidence is that people generally are frightened of saving for pensions," Mr Norgrove told the broadcaster.



"They think that pensions are very complicated. Actually, pensions in many ways are quite simple. Once you've made the initial decision you can let it run."



He also spoke of the decline of generous company pension schemes, such as final salary arrangements, citing in part government rules which made them expensive to administer.



Earlier this week, figures showed that Britain's 100 biggest companies have seen the values of their pension schemes plunge over the past year because of the financial crisis.



Research from actuaries Lane Clarke & Peacock said firms listed in the FTSE 100 index now had a combined deficit of £96 billion, the largest on record, and more than double the £41 billion deficit a year ago.



Just three FTSE 100 companies - Cadbury, Diageo and Tesco - said they offered defined benefits to new employees, the study added.



Mr Norgrove said he expected the impact of the recession on pension schemes to be "manageable".



"Inevitably, in a serious recession, we're going to see more companies going insolvent, but I don't think at the moment we see this as a crisis," he told the BBC.



"Generally speaking, if the sponsoring company stays in business there's time to work this out."



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