‘People need to work longer in to old age for state pension’

PEOPLE need to work longer into old age before qualifying for their state pension in light of increasing life expectancies, according to An Bord Snip Nua.

In a series of recommendations targeted at public and private sector benefits for the elderly, the report also suggests retired civil servants, who escaped recent cuts and levies should also be made to pay their share as they were the only sector of society not to be hit in the recent budgets.

Chairman of Bord Snip Nua, Colm McCarthy, said there was international acceptance that longer life expectancies meant it was too expensive to keep the retirement age at 66.

“If people used to snuff it at 70 and they’ve now decided to snuff it at 80, or 85 or 90, then something’s got to give.

“There’ll either have to be huge increases in taxes to pay for this or huge increases in savings rates in funded private sector schemes.

“If people are unhappy with either of those, it seems to me the obvious alternative is an increase in retirement ages,” he said.

Mr McCarthy said this meant it was no longer sustainable for the state to pay out weekly sums to so many pensioners.

“One of the things that has happened is that there was a sharp increase in life expectancy. And the retirement age is hugely costly for the exchequer and it has happened quicker here than elsewhere,” he said.

His group also urged that the Green Paper on pensions be implemented. This had included proposals to increase private sector pension contributions and raise the minimum age civil servants can claim their pension from.

It said since the Green Paper was published in 2007 the economy had worsened and more fundamental changes were required.

These should include putting a stop to schemes that allowed public servants to accelerate pension contributions at the latter end of their careers, it said.

The report also said people who began claiming their public service pension before the introduction of the controversial levy had been spared and will not be affected by savings suggested by either it or the Green Paper.

The report also called for the cessation of payments into the National Pensions Reserve Fund, because the country could no longer afford this.