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Retirement age to be 75 across the EU?

Retirement age to be 75?

When David Cameron returned from Sweden he enthused about Swedish ideas. The electorate may not be so happy with the latest idea from Sweden.

 

Swedish prime minister Fredrik Reinfeldt says Swedes may have to stretch their working life from 65 to 75 years in order to keep the same standard of living.

 

Since 1960, life expectancy has climbed by eight years and demographic projections foresee a further five-year increase over the next four or five decades. Europeans are living longer and, together with low birth rates, Europe's population is ageing rapidly.

 

In France, retirement age is becoming a major topic in view of the presidential elections, after a highly contested reform proposed by Nicolas Sarkozy was adopted by the French parliament in November 2010, despite week-long mass protests. This increased the legal retirement age from 60 to 62 years from 2017 on, but to receive full pension payments, the French will have to work until the age of 67 in the future.

 

In Germany, the Social Democrats, in coalition with the Greens, voted for the gradual increase of the retirement age against the fierce resistance of trade unions. The highly controversial pension reform became effective on 1 January 2012. The retirement age to obtain a full pension is to gradually rise from 65 to 67 by 2031.

 

Germany is also seeking to make financial help for EU countries dependent on raising retirement ages .The argument is that people in countries including Greece, Ireland, Spain, Italy and Portugal are not able to retire earlier than in Germany. Italy and Spain are raising the retirement age In Greece, retirement before the age of 65 is a fading dream for those still in work. In Poland, they are raising the retirement age for women from 60 to 67 and for men from 65 to 67 from 2013.

 

If you think 67 sounds the new norm, think again. In the Czech Republic, pension reform from January 2013 means that people currently in their 50s will be able to claim pension at 63, people presently around 20 will retire at 69, and children born this year will retire at 73.

 

Life expectancy differs starkly throughout the EU. According to Eurostat, life expectancy for women is the highest in France (85 years), Spain (84.9) and Italy (84.5). For men, it is at 78 in France, 78.6 in Spain and 79.1 in Italy. However, the figures are dramatically lower for countries like Estonia, Latvia, Lithuania, Bulgaria and Romania. In Lithuania the life expectancy for men is 67.5 for men and 78.7 for women, in Latvia, it is 68.1 for men and 78 for women. In Estonia, it is 69.8 for men and 80.2 for women. In Bulgaria, it is 70.1 for men and 77.4 for women, and in Romania – 69.8 for men and 77.4 for women.

 

The Max Planck Institute for Demographic Research says an increase from 65 or 67 is inevitable due to increasing life expectancy, as people will be living ten years longer by 2050.This would mean that the retirement age should be increased by about five years to 72.

 

So for the UK, 72 or 75?

 

The retirement age matters hugely for many types of insurance, as cover ends at retirement date, while new age legislation should prevent discrimination against older workers. 

Health insurance news: 20 February 2012