Latest news with #retirementage
Daily Mail
a day ago
- Business
- Daily Mail
Denmark's state pension age hits 70: Will the UK be next?
Denmark's move to hike its retirement age to 70 by 2040 has got people asking the obvious question - could the same happen here? As things stand now, men and women's state pension age is 66, and between 2026 and 2028 it will rise to 67. Officially, the next rise to 68 is not scheduled until the mid 2040s, which would affect those born on or after April 1977. The Government is required by law to review the state pension age periodically. However, the last two reports in 2017 and 2023 recommended speeding up the increase to 68 - and then went ignored. The next review isn't due until spring 2029, but Labour might take as little notice of any findings as the Tories. It's not as if raising the state pension age is going to become any less of a political hot potato, as money experts pointed out when we asked for their views on Denmark's decision. Meanwhile, it's worth noting that the minimum pension age for accessing workplace and other private retirement savings will rise from 55 to 57 from April 2028, Governments have in the past tended to keep the state pension and private pension ages roughly 10 years apart, so any future increases could well continue to happen in tandem. Labour might stick with 'no change' policy 'Pension ages have been rising around the developed world in the face of a combination of rising life expectancies and falling birth rates,' says former Pensions Minister Steve Webb. The UK faces major challenges in meeting the state pension, NHS and care costs of an ageing population, he says. But regarding the politics of raising the state pension age, he adds: 'Currently policy is to give at least 10 years' notice of changes, which means that increased pension ages will generate no extra revenue for at least two parliaments but will generate negative publicity straight away.' Webb, who is a partner at LCP and This is Money's retirement columnist, goes on: 'It is no coincidence that the last two independent reviews, both of which recommended speeding up the move to age 68, have so far been ignored. It is quite possible that the next review, due during this parliament, will again lead to no change in the legal timetable for increases in state pension age.' Many people don't know their own state pension age - so check 'Each government has to review the state pension age during their term in parliament,' points out Tom Selby, director of public policy at AJ Bell. 'For those looking forward to retirement that may feel like the sword of Damocles hanging over their future pension plans. However, government aren't obliged to accept the recommendations of the review and any further increases in the state pension age are likely to be gradual and a long way in the future.' AJ Bell research shows almost half of all adults under state pension age don't know when they will start receiving it, so Selby suggests checking this and using the knowledge to plan ahead. 'Once you've figured out when you might expect to receive your state pension, you can start working backwards to think about when it might be possible to retire on your private pension savings,' he says. 'If things do change and your state pension age increases by a year, then you're at least starting from an informed position and hopefully won't need to make too many adjustments to your retirement plans.' What are the options? Raise age, moderate payments, hike taxes or means-test state pension 'When is good news, bad news? When it's about living longer and the state pension,' says Stephen Lowe, director at retirement specialist Just Group. 'The good news is that as a nation we're living longer – figures for 2023 from the Office for National Statistics show the number of people aged 90-plus has doubled over the last 30 years. But the fertility rate in the UK is dropping.' Lowe says by 2050 it's projected one in four people in the UK will be aged 65 years and over, up from almost one in five in 2018. 'Here's the bad news – it means that with more people of state pension age and fewer working people, the burden of funding the state pension becomes heavier on those paying taxes. If we don't want to increase taxes, or introduce a means-tested state pension, then there are two main ways to lighten the load – either increase the age at which people receive the state pension or moderate the amount paid. Neither is a political vote winner but the problem isn't going away anytime soon so some changes seem almost inevitable.' State pension age rise will hit people who depend most on it hardest Other developed nations face similar challenges to Denmark on how to balance longer lives with a squeezed public purse, says Standard Life's retirement savings director Mike Ambery. 'The state pension age is subject to constant review and quicker, higher increases remain possibilities alongside other options like removing the triple lock or even means testing – all of which would prove hugely controversial and politically challenging. Raising the state pension age further risks hitting those most dependent on it the hardest. Lower income groups without other sources of retirement income often have shorter life expectancies and might find it harder to work into later life. Any future changes must be taken with great care, and come with plenty of notice to help people plan ahead.'
Daily Mail
a day ago
- Business
- Daily Mail
Denmark raises retirement age to 70: Could Britain follow suit with the state pension?
Denmark's move to hike its retirement age to 70 by 2040 has got people asking the obvious question - could the same happen here? As things stand now, men and women's state pension age is 66, and between 2026 and 2028 it will rise to 67. Officially, the next rise to 68 is not scheduled until the mid 2040s, which would affect those born on or after April 1977. The Government is required by law to review the state pension age periodically. However, the last two reports in 2017 and 2023 recommended speeding up the increase to 68 - and then went ignored. The next review isn't due until spring 2029, but Labour might take as little notice of any findings as the Tories. It's not as if raising the state pension age is going to become any less of a political hot potato, as money experts pointed out when we asked for their views on Denmark's decision. Meanwhile, it's worth noting that the minimum pension age for accessing workplace and other private retirement savings will rise from 55 to 57 from April 2028, Governments have in the past tended to keep the state pension and private pension ages roughly 10 years apart, so any future increases could well continue to happen in tandem. What has happened to pensions in Denmark? Denmark ties its retirement age to life expectancy, and revises it every five years. The country's current retirement age is 67, and this will rise to 68 in 2030 and 69 in 2035. Despite protests in Copenhagen, an overwhelming 81-21 vote in the Danish parliament last week decided to increase it again to 70 in 2040. The latest age hike will affect Danes born from 31 December 2070 onwards. Labour might stick with 'no change' policy 'Pension ages have been rising around the developed world in the face of a combination of rising life expectancies and falling birth rates,' says former Pensions Minister Steve Webb. The UK faces major challenges in meeting the state pension, NHS and care costs of an ageing population, he says. But regarding the politics of raising the state pension age, he adds: 'Currently policy is to give at least 10 years' notice of changes, which means that increased pension ages will generate no extra revenue for at least two parliaments but will generate negative publicity straight away. Webb, who is a partner at LCP and This is Money's retirement columnist, goes on: 'It is no coincidence that the last two independent reviews, both of which recommended speeding up the move to age 68, have so far been ignored. 'It is quite possible that the next review, due during this parliament, will again lead to no change in the legal timetable for increases in state pension age.' Many people don't know their own state pension age - so check 'Each government has to review the state pension age during their term in parliament,' points out Tom Selby, director of public policy at AJ Bell. 'For those looking forward to retirement that may feel like the sword of Damocles hanging over their future pension plans. 'However, government aren't obliged to accept the recommendations of the review and any further increases in the state pension age are likely to be gradual and a long way in the future.' AJ Bell research shows almost half of all adults under state pension age don't know when they will start receiving it, so Selby suggests checking this and using the knowledge to plan ahead. 'Once you've figured out when you might expect to receive your state pension, you can start working backwards to think about when it might be possible to retire on your private pension savings,' he says. 'If things do change and your state pension age increases by a year, then you're at least starting from an informed position and hopefully won't need to make too many adjustments to your retirement plans.' > Check your state pension age: Use the Government's calculator What are the options? Raise age, moderate payments, hike taxes or means-test state pension 'When is good news, bad news? When it's about living longer and the state pension,' says Stephen Lowe, director at retirement specialist Just Group. 'The good news is that as a nation we're living longer – figures for 2023 from the Office for National Statistics show the number of people aged 90-plus has doubled over the last 30 years. But the fertility rate in the UK is dropping.' Lowe says by 2050 it's projected one in four people in the UK will be aged 65 years and over, up from almost one in five in 2018. 'Here's the bad news – it means that with more people of state pension age and fewer working people, the burden of funding the state pension becomes heavier on those paying taxes.' 'If we don't want to increase taxes, or introduce a means-tested state pension, then there are two main ways to lighten the load – either increase the age at which people receive the state pension or moderate the amount paid. 'Neither is a political vote winner but the problem isn't going away anytime soon so some changes seem almost inevitable.' State pension age rise will hit people who depend most on it hardest Other developed nations face similar challenges to Denmark on how to balance longer lives with a squeezed public purse, says Standard Life's retirement savings director Mike Ambery. 'The state pension age is subject to constant review and quicker, higher increases remain possibilities alongside other options like removing the triple lock or even means testing – all of which would prove hugely controversial and politically challenging. 'Raising the state pension age further risks hitting those most dependent on it the hardest. Lower income groups without other sources of retirement income often have shorter life expectancies and might find it harder to work into later life.' 'Any future changes must be taken with great care, and come with plenty of notice to help people plan ahead.'
South China Morning Post
a day ago
- Business
- South China Morning Post
Are workplaces in Malaysia ready to welcome older workers?
Feel strongly about these letters, or any other aspects of the news? Share your views by emailing us your Letter to the Editor at letters@ or filling in this Google form . Submissions should not exceed 400 words, and must include your full name and address, plus a phone number for verification I refer to the article , 'Malaysians slam plan to raise civil servant retirement age to 65: 'let them rest'' (May 21). In Malaysia, the retirement age for civil servants and private-sector employees has been adjusted several times. In 1951, the mandatory retirement age was set at 55 years. It was raised to 56 in 2001, 58 in 2008, then 60 in 2012. Now there is a suggestion to raise it to 65 – a substantial leap. While some argue that such a move would allow experienced workers to remain in the workforce, there are also concerns about the declining physical and cognitive abilities of older people and the potential accident risks this brings. Raising the retirement age could contribute to an increase in workplace and traffic accidents. Age-related changes such as weakened muscles, joint stiffness, reduced agility and decreased stamina can make it harder for seniors to perform tasks safely in industrial settings. Balancing problems resulting in falls are also a significant cause of injury to older adults. Many seniors also experience chronic health conditions, such as cardiovascular disease and diabetes, which can affect their ability to perform work safely. At the same time, cognitive decline could affect their decision-making and reaction time.
Malay Mail
3 days ago
- Business
- Malay Mail
Retirement at 65, a modern saga
MAY 29 — Joseph Schwartz, 62, time-travelled to a distant-future Earth which killed those who turned 60 in the sci-fi book Pebble in the Sky by Isaac Asimov which was published in 1950. Someone born that year would be 75 in 2025. I was reminded of Schwartz following the announcement Malaysia reconsiders the retirement age. In 2012 we moved it to 60, and now the minister wants 65 to be considered. Law Minister Azalina Othman Said a substantial number of older Malaysians are 'young and active.' The minister turns 62 in December. The prime minister said her idea deserved study. Cannot imagine him saying the idea was an attack on our values and has no merit. Anwar Ibrahim turns 78 in August. Like clockwork, Human Resources Minister Steven Sim said that prized study was underway. Sim just turned 43, which is also the age the prime minister was when he first entered Parliament. In an agrarian dominated world before the twentieth century, folks had children as and when biology permitted them. High child mortality was common, and infanticides unfortunately occurred. The rapid development of the last 150 years brought us prosperity and fun things like smartphones. It also wreaked havoc on the traditional family and standard demography. Ageing societies are synonymous with developed economies. Modern medicine extends life expectancies which compounds the ageing society phenomenon. The retirement age, whether the mandatory rule for civil servants and the upper limit for the private sector, has huge ramifications for the country. More so in a country with substantive state support for citizens — state income handouts (sumbangan asas SARA), subsidised fuel, household gas cylinders and public housing, among others — at a time of shrinking oil revenues. Those in employment for decades and those about to be in employment age, both have it hover over them. There are a fair number of years likely between retirement and death, and with negligible EPF savings for the majority with uncertainties over full medical coverage, working on for more years is not optional for millions of Malaysians. The drop in civil service recruitment, rise in graduates and cost of living, and uncertainties in a time of Internet, automation, AI and unaffordable housing, the continued presence of seniors beyond their normal exit points, discomforts younger Malaysians. When people are likely to retire is a huge existential threat to most Malaysians. To pass it over to a study and not a public discourse is quite damning. Even if most Malaysians care about it but are disengaged. This is where political leadership is expected from those who posit themselves as leaders. Malaysia has another factor which punches up the issue like steroids. It holds an expansive migrant population, from Rohingyas to Filipinos, Langkawi to Semporna. They inject themselves into the employment market. The total number of people of working age (citizens and migrant workers) goes up or down with the retirement age. Fountain of youthful objections The Malaysian Youth Council opposes change. Unsurprisingly. The effect on fresh recruitment is highlighted, like by the Sabah teacher's union. The argument is valid. However, the absence of countervailing arguments jars. Many countries of late have increased retirement ages, including Singapore, Thailand, Japan and China. Corrections to retirement ages for the reasons outlined in this column are rife all over the world. And of course, younger people elsewhere are not pleased and the self-righteous spout condescension on how the aged should hug grandkids till they instinctively know the choker hold. Tap out, tap out. There are no shockers delivered today but a sense of aghast that the government is incapable of organising broad consultation beyond asking the Malaysian Employers Federation and trade unions. Many countries of late have increased retirement ages, including Singapore, Thailand, Japan and China. — Freepik pic For example, if Malaysia charts a path to remove reliance on foreign labour, role-replacements are necessary. Up automation and hire Malaysian supervisors with multiple roles, therefore justifying higher wages, is one of many paths to change, in order to accommodate more Malaysians in the employment market while systematically reducing foreign labour. Malaysians have to be alerted that whether the needle is moved or not on retirement age, the burdens on those in the employment market only gets heavier. As the ratio of workers: retirees rises meaning there'd be fewer workers on average to pay for the benefits accrued by the retired — and those below working age — either taxes go up or national debt goes up. Keeping more of the senior high earners — euphemism, taxed more — longer inside the job market also maintains a wider tax pool. It is the new puzzle for societies in which all members of those societies pay the price of missteps. The first generation of knowledge workers from the 1990s approach steadily the retirement zone. It's inconclusive whether a liberal attitude toward retirement ages repays or not. Also, in play the increasing wealth disparity between the rich and poor. Since all of us are affected then all of us should be involved. To leave these decisions to committees appears crude and arcane. Isaac Asimov was 30 when Pebble in the Sky was published. The biochemistry doctoral student was on his way to becoming a professor after a non-combat stint in the US navy. A young man considering the societal effects of artificially age-capped mortality. The protagonist Schwartz despite his age possessed mental abilities to save the galaxy from a virus. The old guy saves hundreds of planets. It's fiction though. But young and old Malaysians need to discuss retirement age, which is not in the fictional realm. It is real and directly affects Malaysians, and the government should facilitate a broader nationwide discussion about it. There's the general election in around two years, and perhaps an excellent opportunity to referendum it. Ask the people directly. How old is old?
Free Malaysia Today
5 days ago
- Business
- Free Malaysia Today
Malaysia's golden opportunity: why 65 is the new 60 for retirement
From J Solomon Azalina Othman Said's recent proposal to raise Malaysia's retirement age to 65 is not merely a recommendation; it is a vital and timely call to action – one that the National Union of Bank Employees (NUBE) wholeheartedly supports. The suggestion by the law and institutional reform minister aligns perfectly with NUBE's own advocacy in our yet-to-be-negotiated 20th collective agreement, and we are ready to assist the minister in realising this crucial initiative. Consider the global landscape: countries like Canada and the US already have 65 as the retirement age, while Australia has raised it to 67. Several nations in the EU are also signalling similar moves in response to demographic shifts and increased life expectancy, so why not Malaysia? Hundreds of thousands may be retiring too early In the private sector, general estimates suggest that about 200,000 workers retire every year. This is a broad estimate and not strictly tied to the age of 60, as private sector retirement clauses can vary – some may retire earlier or later. In the public sector, some 1,804 civil servants under 60 opted for early retirement in the first nine months of 2024, according to the latest publicly available data from the Prime Minister's Department. As in the private sector, it's important to note that these are early departures, not retirements upon reaching the mandatory retirement age. In the banking sector particularly, NUBE has seen a significant decline in membership over the past 25 years, dropping from an estimated 30,000 three decades ago to about 15,000 members currently. As older workers retire and technology advances, many traditional clerical and routine banking positions have been abolished or are increasingly handled by automation and artificial intelligence. Why a more senior workforce is good for the banking industry A more senior workforce can be highly beneficial for the banking industry. Senior employees often possess decades of experience and invaluable tacit knowledge. They've navigated various economic cycles, regulatory changes, and shifts in customer behaviour, offering insight that younger, less experienced employees may lack. This experience is crucial for complex problem-solving, risk management, and strategic decision-making. Senior bankers can also serve as excellent mentors to younger colleagues. They tend to establish long-standing relationships with clients – relationships built on trust and a deep understanding of financial needs. These are invaluable for customer retention and business growth. Older clients, in particular, may feel more comfortable dealing with bankers of a similar age. Moreover, senior workers typically exhibit higher job satisfaction and lower turnover rates than younger staff. This stability can reduce recruitment and training costs, while contributing to a more consistent and reliable workforce. Banks can invest in upskilling and reskilling programmes for older employees, fostering an age-inclusive workplace culture that values both experience and technological capability. Early retirement option: more pros for the young generation Raising the retirement age to 65 must still allow workers the flexibility to retire at 60 if they choose to do so. This ensures that individual circumstances, health conditions, and financial readiness are taken into account. One major benefit of extending the retirement age is the reduced risk of seniors becoming a financial burden on their children. By remaining in the workforce longer, individuals can support their own living expenses, healthcare, and lifestyle, alleviating potential strain on the younger generation. This promotes intergenerational financial independence and can improve the overall quality of life for retirees. Furthermore, empirical evidence from Malaysia's previous retirement age increase in 2012 suggests that allowing senior workers to remain employed for an additional five years has not significantly hindered the job prospects or earnings of younger workers. More than a decade has passed since that adjustment, and there is no widespread evidence that it created a bottleneck in career progression or suppressed wages for new entrants into the workforce. In fact, changing preferences among the younger generation support this argument. A growing number of younger Malaysians are drawn to the flexibility and autonomy offered by the gig economy, entrepreneurship, and commission-based or on-field jobs. These alternatives contrast with the traditional desk-bound roles often held by older workers, suggesting a natural diversification of the labour market. As younger workers pursue these new employment models, the presence of older workers in conventional roles is less likely to compete with them, mitigating concerns over job scarcity for new graduates and early-career professionals. The time to act is now The advantages of raising the retirement age by another five years in both the private and public sectors far outweigh the drawbacks. Malaysia's aging population means people are living longer and healthier lives. Yet our current retirement age of 60 may be pushing productive individuals out of the workforce prematurely, thereby wasting valuable human capital. Some may express concern about work-life balance. But we must reframe our understanding: a longer working life does not necessarily mean more strenuous work. It can involve phased retirement, flexible roles, and a greater focus on leveraging experience. The emphasis should be on the quality of work life, not merely its duration. A longer working life also addresses the issue of financial security. With the cost of living rising and many Malaysians having alarmingly low EPF balances, extending the retirement age to 65 offers a critical opportunity to build stronger retirement savings. It ensures a more dignified future and improves pension fund sustainability. J Solomon is the general secretary of the National Union of Bank Employees and a FMT reader. The views expressed are those of the writer and do not necessarily reflect those of FMT.
