Problem with fixed pension age scheme
The government's fixed pension age strategy will not work because it is based on a dramatic slowdown in life expectancy improvements, according to an asset management advisor.
The Actuarial Profession claims the government has based all of its plans on there only being a four year increase in life expectancy for 65-year-old men over the next half century, but, using their own figures, there has been a nine year increase in the last 50 years.
"The government is making the heroic assumption that recent improvements in life expectancy will dramatically slow down. Yet medical advances continue unabated," said Michael Pomery, president of the Institute of Actuaries.
"The simple truth is that no-one knows what life expectancy will be 40 years from now - just as it is impossible to know who will win the World Cup in 2046. It is essential therefore that the State Pension Age be made more flexible."
The profession suggests a long term approach which would tie the pension age to an average longevity, ensuring that any extra life expectancy would be spend two-thirds in work and one-third in retirement and making the government's tests for reform fairer, more affordable and sustainable.
For pensioners worried about what will happen after they have gone, Scottish Friendly offer the simple and affordable Over 50's Guaranteed Protection Plan, for more information click on our free brochures page.
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