The British coalition government has announced that it will set from 2016 the qualifying age for old-age pensions for men at 66 instead of 65. Women have hitherto received old-age pensions at 60, but the qualifying age will be brought into line with that for men through a speedier timetable than hitherto proposed.
Although the British population is still growing, partly because of net immigration, and although the British old-age state pension is one of the lowest in the developed world, the burden on the working population of providing for retirement at 60 for women and 65 for men is no longer considered sustainable. The government also is proposing to change the rules for compulsory retirement of employees when they reach 65 in the hope that this will encourage a more flexible retirement culture.
The government faces increasing costs in paying public-service pensions in Britain. The number of public-sector employees increased significantly under the last Labor government, and in some parts of the country such as the northeast of England the public sector employs more than half the working population. Public-sector pensions, which have hitherto been based on final salaries, have been, like old-age pensions, unfunded and have to be met out of receipts from taxes that are largely paid by the working population.