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Last Updated: Friday, 23 September 2005, 05:03 GMT 06:03 UK
Up pension age to 69, report says
Pensioners protest
Pensioners have been demanding higher state pay-outs
Britons may have to wait until the age of 69 to pick up their state pension, plans put to the government suggest.

A report by the National Association of Pension Funds (NAPF) said everyone should be eligible for a "citizen's pension" starting at 109 a week.

But, to ensure the payment rises in line with average earnings, people would have to retire later, it added.

The report has been submitted to the Pension Commission, which will outline its reform proposals later this year.

Its report suggested Britons would not be able to pick up their pensions until the age of 67 by 2030, rising to 69 years of age by 2040.

Citizens pension

The NAPF first put forward its idea of a universal citizens pension in December, as a way of removing 10 million future pensioners from means tested benefits.

The pension would be a payment available to anyone resident in the UK who reaches a set pensionable age, regardless of national insurance contributions.

How many employers would be prepared to employ this older generation
C Preece, Tamworth, UK

The NAPF said the proposed system would ensure that many women - who often fail to make full national insurance contributions - would still receive a full state pension.

The new system could be funded by pooling all the money that is currently put into the basic state pension, the state second pension, contracted out schemes and pension credits, the NAPF has said.

Retire later

However, to ensure that the value of new pension keeps rising in line with earnings - rather than just with inflation as at present - the state retirement age would also have to rise.

"It is realistic to assume that the state pension age will have to go up to 67, or even higher at some point in the future," an NAPF spokesman said.

The organisation's final report is being submitted to the government and the Pensions Commission - led by Adair Turner - which is expected to publish its final recommendations for reform in November.

Earlier this week Chancellor Gordon Brown said the UK must have a "national debate" about raising the state pension age.

He stressed that nothing would be decided until such widespread discussions had taken place.

Last Sunday, Work and Pensions Secretary David Blunkett also said a further rise in the state pension age should be considered.

He has been in the USA where they are already committed to phasing in a state retirement age of 67.

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