This could involve increasing the retirement age from 65 to 70. From an economic point of view this is beneficial because it leads to more tax revenue (people will pay income tax for longer) and more consumer spending. Also, the government can delay paying pensions saving substantial funds. Also, increasing the retirement age increases the supply of labour; this could be a benefit in labour markets where there is a shortage of skilled (experienced) workers.
The main problem with this policy, is that it will be highly unpopular, especially from people who are nearing retirement age. People may say the government is going back on its word to provide pensions at a certain age. In the UK, the government has pledged to increase the retirement age to 67, but this will not come in for a long time and therefore does not tackle the short term debt.
Another problem with increasing the retirement age is that it will affect different types of workers differently. A manual labourer will find it difficult to keep working until 70. But, for an office worker it will be easier. Also, many well paid workers will be able to afford to take a private pension early.
This could involve increasing the retirement age from 65 to 70. From an economic point of view this is beneficial because it leads to more tax revenue (people will pay income tax for longer) and more consumer spending. Also, the government can delay paying pensions saving substantial funds. Also, increasing the retirement age increases the supply of labour; this could be a benefit in labour markets where there is a shortage of skilled (experienced) workers.The main problem with this policy, is that it will be highly unpopular, especially from people who are nearing retirement age. People may say the government is going back on its word to provide pensions at a certain age. In the UK, the government has pledged to increase the retirement age to 67, but this will not come in for a long time and therefore does not tackle the short term debt.Another problem with increasing the retirement age is that it will affect different types of workers differently. A manual labourer will find it difficult to keep working until 70. But, for an office worker it will be easier. Also, many well paid workers will be able to afford to take a private pension early.
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