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02 Sep 2013

Report Claims Raising State Pension Age Creates Inequalities

According to new research by the Trades Union Congress, raising the state pension age to 67 by 2020 contributes to a growing inequality in retirement benefits across different demographic groups. The raise in age was to reflect the increased life expectancy of British employees.

For example, a 40-year-old female worker, based in east Dorset, is expected to receive £67,000 in pension income more than her counterpart living in Corby, the Financial Times reported. If they both retire in 2028, the former can expect to receive total of £195,436.80 in retirement income, compared to the £137,030.40 for the latter.

The Trades Union Congress noted that while the idea behind the rise in state pension age may appear sensible as a means to relieve the burden on the country´s financial system, it does not fairly address the needs of all members of society. Life expectancy is on the rise but it does not change at the same rate for all age groups, for both genders or for all geographical locations, the report claimed.

Researchers also calculated that by 2028, the gap in the state pension income is predicted to reach 47.7%, up from 37.7%, for men calculated at present projections. Meanwhile, the difference for women across regions is set to rise to 52.6% from 33% currently.

The Trades Union Congress is calling for a revision of the government´s decision to raise the state pension age. They have requested a consideration of ways to make up for inequalities of life expectancy and to ensure that all British employees have fair access to retirement benefits.

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