White Paper on pensions issued by EC

The European Commission (EC) has issued the White Paper - a publication that addresses the impact retirement funds have on national budgets. Initiatives are proposed that will support Member States in the reform of state pension schemes. A goal of the plans is to enable people to stay in work for longer periods of time, which will help them set more money aside for later life. It is hoped this will result in an increase of the average age at which individuals finish work, which is described as a reflection of rising age expectancies. Indeed, the Attitudes to Age in Britain report from the Department for Work and Pensions specified the national life expectancy stands at 78.2 years and 82.3 years for men and women respectively. It was suggested this could make considerations such as pension transfer more important, as people will have to maximise the value of their pension pots in order to sustain their lifestyle for a longer period of time. The White Paper raised the question of whether or not women should work as long as men, given the discrepancy in life expectancies. In 2009, 13 Member States had lower pension ages for women than they did for men, but 18 of the countries will have this gap levelled by 2020. This is thought to be a positive step, as it could increase the employability of older workers and later life income for women will be improved as a result The EC argued the implementation of higher pension ages will not inevitably lead to people working longer. As a result of this, the elimination of mandatory retirement ages - which were recently abolished in the UK - is advised, which will mean people have the option to work longer without being forced out of their position. A recent survey was cited as indicating 61 per cent of Europeans support this action and wish to have the opportunity to work for longer should they choose to. Ashall Glover Financial Services, pension transfer specialists Posted by Charles Powell