Sam Dunn: Working for longer will be fairer in the end

Critics of the reforms ignore the cost of our increased life expectancy

Boy, is there some way to go. Amid the excitement that greeted the Government's blueprint for our retirement, it was easy to forget that we're only at the White Paper stage and that a long consultation period lies ahead.

If - and it's a big if - the proposed changes (see page 18) pass the Treasury's "affordability" test and garner cross-party political support, they probably won't be introduced for at least another seven years.

One of the most eye-catching proposals - raising the state pension age to 68 - won't apply until 2046.

What happens in the meantime is anybody's guess. Successive governments - red, blue or yellow - could cause another rumpus and scrap it all in favour of something else as yet undreamt of.

But, fingers crossed, they won't. The White Paper contains much to stop the rot caused by millions of Britons failing to save for their old age.

Although many parts of the legislation have yet to be fully developed, the right building blocks are in place.

For those workers without company pension schemes, the new national saver scheme "personal accounts" should bring real benefits. Individuals will be forced to ask to opt out of the scheme, which should go a long way to reversing the apathy that afflicts too many low and middle-income earners.

The simplification of the overwrought state second pension should lead to a flat-rate top-up to help those who need it most, while linking the basic pension to average earnings will let the elderly share in the prosperity of the nation.

Slashing the number of years they have to work to qualify for the full basic state pension will also help to create a much fairer deal for women (and male carers) whose commitments to children or to the sick or elderly prevent them from taking paid work.

There's been much grumbling about the proposal to introduce a new retirement age of 68 by 2044, which will affect anybody aged 27 or under.

Figures from the Department for Work and Pensions suggest that, at present, anybody earning a wage of £23,000 and due to retire in 2050 with no private pension savings could expect to get a weekly state pension of £136 (at today's prices) at the age of 65.

Under the new package, if the same person were to retire at 68, the basic pension would rise only to £139, because of a fall in the value of the means-tested pension credit. However, since the individual would have been "softly compelled" to save into a personal account, the DWP says their weekly income would in fact amount to £219.

These critics who balk at raising the age of retirement are ignoring the cost of our increased life expectancy (set to reach 89 for men by 2050, and the early 90s for women). In any case, people will still be able to retire much earlier than 68, as long as they make their own private provision.

Not everyone will be able to do so, but there will be more than enough flexibility in this new regime to allow much better provision all round.

s.dunn@independent.co.uk