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Last Updated: Thursday, 17 November 2005, 07:52 GMT
State pension age 'should rise'
Pensioner in a Post Office
The basic state pension may be given a significant boost
A rise in the basic state pension and an increase in the age at which it can be claimed is to be recommended by the Pensions Commission, the FT has said.

The commission's report will call for a more generous state pension but a rise in the claimant age to 67 when it is published this month, the paper said.

A new national savings plan, in which individuals will automatically have to enrol, will also be recommended.

The commission has been tasked with finding a blueprint for pension reform.

A Pensions Commission spokeswoman said the FT article was speculative and that it would not be commenting ahead of the report's publication on 30 November.

New savings plan

According to details of the report obtained by the FT, the commission will call for a generous rise in the state pension.

This should rise from the current 80 a week to closer to the 109 a week paid out through the means-tested minimum income guarantee.

To pay for this increase, the report will recommend that the age at which people can claim the state pension should rise from 65 to 67.

I certainly think that this kind of headline is not going to go down very well
Dr Ros Altmann

The proposals, to come into force after 2020, would affect everyone currently under the age of 50.

The report will also call for the creation of a new national savings plan, modelled on a scheme currently being set up in New Zealand.

Individuals would be enrolled automatically, although they would still retain the right to opt out of the scheme.

One pension expert said any proposal to raise the state pension age would be unpopular.

"I certainly think that this kind of headline is not going to go down very well, especially after the recent deal we have seen for public sector pensions," Dr Ros Altmann, pensions expert at the London School of Economics, told the BBC.


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