State pension fears as France hikes retirement age – and UK set to do so next | Personal Finance | Finance
France is planning to increase its state pension age by two years by 2030. The new proposals state French citizens will have to reach 64 in order to qualify for a full pension.
The new proposals state French citizens will have to reach 64 in order to qualify for a full pension.
In a televised New Year’s address, President Emmanuel Macron said: “We must work longer.
“We need to strengthen the pension system, which if we do nothing will be threatened, since we will rely on debt to finance it.”
From 2027 onwards, it means the French will need to have worked for some 43 years to get the full pension.
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It said: “As the number of people over state pension age increases, due to a growing population and people on average living longer, the Government needs to make sure that decisions on how to manage its costs are, robust, fair and transparent for taxpayers now and in the future.
“It must also ensure that as the population becomes older, the state pension continues to provide the foundation for retirement planning and financial security.”
Chancellor Jeremy Hunt recently confirmed the review would feedback in “early 2023”.
By law, the results must be published by May 7, 2023.
Gary Smith, financial planning director Evelyn Partners, analysed what a change in the state pension might mean.
He said: “Analysis has suggested that if the state pension age rises to 68 a year earlier than planned, then the Treasury would save about £10billion.
“That fiscal benefit would only accrue for the Government in power at the time, and the Government of today might be wary of taking unpopular decisions that don’t benefit them.
“But previous rises in the state pension age have not been as politically controversial as governments had feared.”
Mr Smith suggests announcing a state pension age increase earlier than expected at the Budget next Spring would allow the Treasury to “show it was taking hard decisions to improve the public finances”.