The Pensions and Lifetime Savings Association (PLSA) has responded to the Independent Review of the State Pension Age by calling for no further increase to the age people receive their state pension.

The PLSA says raising the state pension age further would cause "unacceptable detriment" to two specific groups of people, including those with lower than average life expectancies who might only receive very little state pension; and those with lower the average health life expectancies who might struggle to stay in the labour market before state pension age.

In its response, the PLSA recommended that the so-called 'triple lock' is replaced by indexation in line with earnings, so that the state pension maintains its current value of around 30 per cent of average (median) earnings.

Graham Vidler, PLSA director of external affairs, said: "We believe the fairest approach for current and future generations of pensioners is to drop the triple lock and halt further increases in State Pension age."

"A State Pension maintained at 30 per cent of average earnings can provide a strong basis for future retirement incomes, and removing the triple lock can keep it affordable - without the need to increase State Pension age still further to the detriment of people with poorer health.

Vidler added that PLSA also believes proposals for a variable pension age, while attractive in tackling socio-economic differences, would sacrifice the simplicity and clarity of the current system.

"On balance, we support the current system of a single State Pension age for all," he said.

The response from the PLSA also highlights the impact changes to the State Pension age will have on some pension schemes, especially those with defined benefit (DB) schemes.

Many of those schemes still retain links to the state pension, which would be affected in different ways by any changes to the mechanism for calculating the state pension age.

First published 06.01.2017

Lindsay.sharman@wilmingtonplc.com