Parliament to vote on changes that could save country's pension system from funding crisis
As part of a move to overhaul its pension system and avoid a funding crisis, the British government proposed increasing the retirement age from 65 to 68 by 2046.
With people living longer and having fewer children, there are worries that the country's pension system might not be strong enough to support the aging population.
Many of the changes proposed by British Work and Pensions Secretary John Hutton were recommendations that came out of a 2002 panel that warned there will be 50 per cent more pensioners in Britain by 2050 and 10 million workers aren't saving enough for retirement.
To help more people put money away for the future, Hutton also proposed introducing a National Pensions Saving Scheme, into which workers would be automatically enrolled in 2012.
The plan includes an automatic annual employee contribution of four per cent of their salaries, with a matching three-per-cent employer contribution and a one-per-cent government tax relief.
The plan also includes a proposal to link benefits to earnings. The changes need to be passed by Parliament before taking effect.
Many industrialized nations have either raised, or are considering a hike in retirement age to shore up their pension plans. Italy raised the age for full pension to 60 from 57; Belgium raised its ealiest age of retirement from 58 to 60; Germany will raise the age from 65 to 67 between 2012 and 2035; and the United States is gradually raising the age to 67.
With people living longer and having fewer children, there are worries that the country's pension system might not be strong enough to support the aging population.
Many of the changes proposed by British Work and Pensions Secretary John Hutton were recommendations that came out of a 2002 panel that warned there will be 50 per cent more pensioners in Britain by 2050 and 10 million workers aren't saving enough for retirement.
To help more people put money away for the future, Hutton also proposed introducing a National Pensions Saving Scheme, into which workers would be automatically enrolled in 2012.
The plan includes an automatic annual employee contribution of four per cent of their salaries, with a matching three-per-cent employer contribution and a one-per-cent government tax relief.
The plan also includes a proposal to link benefits to earnings. The changes need to be passed by Parliament before taking effect.
Many industrialized nations have either raised, or are considering a hike in retirement age to shore up their pension plans. Italy raised the age for full pension to 60 from 57; Belgium raised its ealiest age of retirement from 58 to 60; Germany will raise the age from 65 to 67 between 2012 and 2035; and the United States is gradually raising the age to 67.
