Brexit Puts Pressure On State Pension Age, Weakens Economy

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The Brexit had made the future of the state pension uncertain, John Cridland, a former CBI director revealed.

British government is considering to rise the retirement age due to the consequences concerning with UK leaving EU.

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New calculations reveal a “hard Brexit” in which migration is greatly reduced, could push up retirement ages, potentially forcing people to work well into their mid-70s.

However, Mr. Cridland told an audience at an International Longevity Centre conference that the future ratio of pensioners to working age people – a major factor affecting the cost of the state pension – was now “unpredictable” due to three factors: life expectancy, fertility and post-Brexit migration policies.

Projections calculated by actuaries at Hymans Robertson show a “hard Brexit” could result in the state pension age needing to be raised by 18 months for people currently under 40.

The calculations are based on projections by researchers at King’s College London which assume national insurance 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 fewer under 70 paying the pensions of over a million more over 70.

Professor Sarah Harper, director of the Oxford Institute of Population Ageing, said: “The state pension may well have to be revised and this will come as a nasty surprise to many.”

On Monday the European Union presented a bleak forecast for the British economy in the wake of the Brexit vote. For Britain, “economic growth is projected to moderate in 2017 and weaken further in 2018,” largely coinciding with the period during which the U.K. is to negotiate its divorce terms with the 27 other EU nations.

(AP, pht)

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