UK: State pension age 'should be 70'

. LONDON, England / UK Press Association / October 19, 2009 The state pension age should rise to 70 as soon as "reasonably practical", company directors have argued. The Institute of Directors called for a "radical reform" of both the state and private retirement benefit systems. As well as raising the state pension age to 70 in the face of "greatly increased" longevity, the IoD also called for the abolition of most means-tested state retirement benefits. The savings made should be diverted to the provision of a universal basic state pension "probably" above the current level, said the report. Graeme Leach, the IoD's chief economist, said: "Radical simplification is needed. Startling increases in longevity in recent decades also mean that it is unrealistic to expect to be able to fund a potential 25 to 30-year retirement from an effective 30 to 35-year working life. "New approaches are needed to recognise this reality. The whole area of retirement needs to be looked at holistically, including how we fund the care needs which will come with increasing longevity. "We need a state and private retirement system fit for the 21st century. This is a policy journey which needs to begin now." In a report called Roadmap For Retirement Reform, the IoD said it was time to usher in change to deliver better outcomes for consumers, better understanding and better engagement in long-term saving. Photo courtesy: BBC News Women's retirement age is already being gradually increased from 60 to 65 to bring them in line with men, and the Government wants to delay pensions until 66 by 2026, while the Conservatives have proposed making people work until 66 by 2016. The report's author Malcolm Small, senior adviser on pensions policy at the IoD, said: "Both state and private pension systems have now become so complex that people are becoming disengaged from pension saving and are looking for alternatives. [rc] Copyright © 2009 The Press Association.