Brexit migration cuts could push state pension age up

B ritons may need to work longer if immigration is cut in the wake of Brexit, according to a warning from the Government’s pension adviser.John Cridland

, a former CBI director examining the state pension age for the Government, said the “Brexit Element “had actually made the future of the state pension

uncertain.The Federal government’s decision on pension changes, due in May, will be informed by Mr Cridland’s report to be published one month previously.

Brexit is likely to decrease the variety of people of working age coming into the UK from the EU and, unless this shortage is made up somewhere else, the UK’s old-age dependency ratio looks set to riseFrancois Barker, Eversheds Sutherland

New computations expose a”tough Brexit”where migration is considerably reduced, could rise retirement ages, potentially requiring individuals to work well into their mid-70s.

Mr Cridland’s forthcoming report will be based on the current Office for Spending plan Duty projections, which do not take Brexit into account, suggesting it could quickly end up being outdated.However, he informed an

audience at an International Longevity Centre conference that the future ratio of < a href=http://www.telegraph.co.uk/pensions-retirement/financial-planning/five-steps-pension-perfection-2017/ > pensioners to working age people– a significant aspect affecting the expense of the state pension– was now “unpredictable” due to three elements: life span, fertility and post-Brexit migration policies.P rojections computed by actuaries at Hymans Robertson show a”tough Brexit “could result in the state pension age requiring to be raised by 18 months for people presently under 40. The calculations are based on projections by scientists at King’s College London which assume national insurance coverage number registrations by migrants fall after”extreme” Brexit migration policy from around 600,000 to 140,000 in three years.Eventually this would lead to over a million less under 70 paying the pensions of over a million more over 70.

Prof Sarah Harper, director of the Oxford Institute of Population Ageing, stated: “The state pension may well have actually to be modified and this will come as a nasty surprise to numerous.” The figures are based on a possible “hard Brexit”

Credit: Daniel Leal-Olivas/PA aw firm Eversheds Sutherland, which is looking into the effect of Brexit on the state

pension age, has actually cautioned that if the Government stops working to raise state pension age in the middle of falling migration, it will need to raise taxes instead.Francois Barker, a director at the firm, stated: “All the signs are that Brexit is likely to lower the number of individuals of working age entering the UK from the EU and, unless this shortfall is comprised in other places, the UK’s old-age dependency ratio looks set to rise even further than currently predicted.”This might force the Government to increase state pension age, reduce the rate of the state pension or raise taxes.”A spokesman at the Department for Work and Pensions said: “We are dedicated to examining the state pension age each parliament

and consider the most up to date projections at the time. “

Source

http://www.telegraph.co.uk/news/2017/02/12/brexit-migration-cuts-could-push-state-pension-age/

Share This Post On
error: Alert: This Content is protected !!

Pin It on Pinterest

Share This

Share This

Share this post with your friends!

%d bloggers like this: