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UK ends retirement at 65

By Jennie L. Phipps · Bankrate.com
Sunday, August 1, 2010
Posted: 10 am ET

We're not the only country in the world struggling with retirement planning and facing a dilemma over how to fund programs like Social Security.

Britain announced Friday that it would eliminate mandatory retirement at 65. The government said that the change was designed to give people more choice, but cynics pointed out that in January Britain's Equality and Human Rights Commission urged the abolition of what's known as the default retirement age, or DRA, because it would keep people who continue to work paying taxes and add $23.4 billion per year to government coffers.

The Paris-based Organisation for Economic Co-operation and Development, or OECD, recently released a study of retirement programs and effective retirement ages in all its 30 member countries. The findings are fascinating.

The five countries where people retire latest are:

  1. Mexico, 73.
  2. Korea, 71.2.
  3. Japan, 69.5.
  4. Iceland, 68.9.
  5. Portugal, 66.6.

The five countries where people retire earliest are:

  1. France, 58.7.
  2. Austria, 58.9.
  3. Luxembourg, 59.2.
  4. Slovak Republic, 59.3.
  5. Belgium, 59.6.

The OECD calculates the effective retirement age in the U.S. to be 64.6 and the effective retirement age in the U.K. is 63.2

The OECD also says that in the mid-2000s, taking into account household size, net incomes of people age 65 and over averaged 82 percent of those of the population as a whole in OECD countries.

In some countries, Social Security looks pretty shabby. On average, men in Luxembourg will receive around $825,000 in government-paid pensions over their lifetimes and women will get $1 million. On average,  lifetime pensions from government-paid plans are are worth $400,000 for men and $475,000 for women in OECD countries.

But that's not true everywhere. In Korea, for instance, 82 percent of those over 65 receive retirement incomes that are below the poverty line.

After reading this report, I'm counting my blessings. The prospects for my retirement could be much worse.

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