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Call to raise retirement age to at least 70

Older worker Image copyright Getty Images

The retirement age should rise to at least 70 in rich countries by 2050 as life expectancy rises above 100, according to a new report.

The World Economic Forum said that employees should continue working until 70 in nations such as the UK, US, Japan and Canada.

The increase will be needed, as the number of people over 65 will more than triple to 2.1 billion by 2050.

By then, the number of workers per retiree will have halved to just four.

Michael Drexler, head of financial and infrastructure systems at the World Economic Forum, said the expected rise in longevity was the financial equivalent of climate change.

"We must address it now or accept that its adverse consequences will haunt future generations, putting an impossible strain on our children and grandchildren," he said.

In the UK the state pension age is due to rise from 65 in 2018 to 68 by 2046.

A report for the Department for Work and Pensions earlier this year has suggested that workers under 30 may not get a state pension until they are 70.

The Forum's report, We'll Live to 100 - How Can We Afford It, said that governments need to make it easier for workers to save for their retirement and praised recent reforms in the UK.

The auto-enrolment scheme means more than six million British workers have now been signed up automatically to a pension savings scheme, but fears remain over how much is being set aside.

No silver bullet

The WEF said the retirement savings gap was forecast to rise from $70tn to $400tn by 2050 in the eight countries studied: Australia, Canada, China, India, Japan, Netherlands, the UK and the US.

The gap is the amount of money required in each country to ensure a retirement income equal to 70% of a person's pre-retirement income.

Jacques Goulet, president of health and Wealth at Mercer, which worked with the Forum to produce the report, said the issue was at a crisis point.

"There is no one 'silver bullet' solution to solve the retirement gap. Individuals need to increase their personal savings and financial literacy, while the private sector and governments should provide programmes to support them," he said.

The Forum also says that countries should aggregate and combine pensions data to give workers a full picture of their financial position.

It cites Denmark, where an online dashboard collates pension information to give individuals details of their different pension savings accounts.

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