The pensions revolution in Europe continues with the publication in Britain today of a new law that is the biggest reform of the system there in 60 years. It will lengthen working lives over the next 40 years by three years for everyone before they can claim their state pension, but in a trade-off the total number of years they will have to work to qualify is slashed.
Ministers say the plan is needed to prevent a financial crisis. Retirement age will go up to 68 by 2046 but both men and women will only need 30 years contributions to qualify, instead of 44 and 39 as at present. A woman’s basic weekly rate is also set to nearly double. But the link between pensions and wages was scrapped by the first Thatcher government in 1980 and they are now linked to prices. There’s only a promise to re-establish the wages link during the next parliament.
Parliament still has to approve the law. Meanwhile in Germany the government there has published its ideas on pensions reform, raising the retirement age to 67 by 2029, and making it easier for the over-50’s to find work. Germany faces one of the tightest labour markets in years to come; with a low birthrate by 2036 there will be two active Germans for every retired one.