Lord Turner, presenting the report, admitted that the British pension system “faces serious challenges”. These include, first of all, an increase in life expectancy and rising pension costs. Currently, British men retire at 65, women at 60. Several years ago, a law was approved to raise the retirement age for women to 65 as well from April 2020. The Turner Commission proposes raising this age to 66 by 2030, to 67 by 2040, and finally to 68 by 2050.
At present, the British pension consists of three components: a basic state pension paid to all men and women who have reached retirement age and have made contributions to the National Insurance fund; an employer supplement calculated on the basis of length of service and the employee's income level; and savings made through various pension funds (optional). The Commission noted that between 10 and 12 million Britons of working age are currently making insufficient contributions and savings for an acceptable level of pension income in the future.
Along with raising the retirement age, the commission proposed increasing the basic state pension and creating a special national pension savings scheme that most Britons would join.
The UK government fully supported the Pensions Commission's report. The new British Secretary of State for Work and Pensions, John Hutton, speaking in parliament, said the country needs a 21st-century pension system. “Thanks to advances in science, technology and healthcare, life expectancy is increasing,” he stated. “Today there are only two workers per pensioner, compared with ten workers a hundred years ago. Our children will live on average 24 years after retirement, whereas previously people lived only 11 years,” he cited statistics. All this, according to the minister, indicates the need to fundamentally reform the pension system, increase contributions and raise the retirement age.