Government plans to increase the retirement age by six months per year have been announced this week by pensions minister Steve Webb.

The proposals are a reflection on Britain's aging population and designed to avoid a health care crisis.

Steve Webb said that the target was 'ambitious' but said the retirement age had already been rising for women.

"If someone works an extra year they can add 10 per cent to their pension for life. What we are doing is catching up with decades of longer living," he said.

"We are living longer but the labour market and people's retirement age has not been keeping up. I have fought against a vague target of trying to get people to work longer to have something more specific."

The average age of retirement is 64.7 for men and 63.1 for women.

The number of over-65s in England is expected to increase by 51 per cent over the next 20 years and the numbers of those ages 85 and above will double by 2030.

The trend will hugely increase costs to the NHS, elderly care and state pension systems.

Nigel Green, chief executive of the deVere Group, an independent financial advisory group with $10bn under management, said the plans are 'flawed' but serve as a 'wake-up call'.

"With the burgeoning pensions crisis and looking health and care crises, understandably the government needs to do something radical. However, I believe the latest plans could be flawed," he said.

"This measure is borne out of a desperate need to tackle the UK's pensions, health and care crises and therefore must act as a wake-up call for everyone that retirement planning is increasingly a personal responsibility"

He added: "With life expectancy increasing - meaning savings need to stretch further- the cost of living on an upward trend, increasing deficits in company pension schemes, the low interest rate environment, rising care and medical costs, and the fact that it is highly improbable that the State will be able to financially support retirees in the future as it has done for previous generations, we must all start putting money aside for our mature years as early as possible."

First published - 09.10.2014

Lindsay.sharman@wilmington.co.uk