BBC: Raising retirement age results in no government savings

[pampango]

Pension age increase sees 'no saving'

http://www.bbc.co.uk/news/business-16419888

The government will make no savings by raising the public sector pension age to 67, a pensions consultant has said.

The government has questioned the assumptions used in the study. It said they ignored the effect of higher pension contributions and the already reduced levels of inflation proofing.

Last month the government announced that it was pressing ahead with the introduction, from 2015, of new career average schemes for most public sector employees, which will be designed to be cheaper to fund.

Mr Ralfe concludes that the cost to the taxpayer, before the reforms, of having a retirement age at 60 was 31% of the average public sector salary. After the reforms, he says the cost to the taxpayer of having the retirement age at 67 will be broadly the same: 31% of a teacher's salary, 32% of an NHS worker's salary and 26% of a civil servant's salary.

[muriel_volestrangler]

1. That is with a pension that pays more when it finally does start paying, though

The consultant's quote was:

"The total cost of the more generous, but later pension, is virtually the same as the cost of the current, less generous but earlier pension," said Mr Ralfe.

So this is not entirely surprising. It's not a general 'you don't save money by increasing the pension age' result.