Government quashes pension age rise suggestion

Updated at 6:09 am on 29 July 2009

The Government does not support raising the superannuation eligibility age from 65 to 67, despite a report saying the move could save the country $100 billion by 2061.

Prime Minister John Key says the current pension system is affordable and he does not intend to accept the report's advice.

"It's not the intention of the Government to change the age of eligibility," he said.

"In my view New Zealand super in its current form is affordable and I've made it quite clear that it would be my intention to resign from Parliament if I broke that promise I made to New Zealanders."

Finance Minister Bill English has also said National Party policy is for no change to eligibility age or levels of payment.

Grey Power spokesperson Ian Anderson says he would not oppose increasing the age, providing there was a long lead-in time, a higher minimum wage and a culture change making it easier for older people to get jobs.

Retirement Commissioner Diana Crossan said last week that by 2032 there will be twice as many people over the age of 65 as there are now.

She said decisions need to be made sooner rather than later on whether the eligibility age needs to be raised and the level of payments lowered.

Auckland University retirement and policy research centre co-director Michael Littlewood says the report is being unnecessarily alarmist.

He says raising the eligibility age should not be considered on the grounds of cost, because all estimates have shown that the cost of superannuation is not a compelling reason for changing public policy.

Michael Littlewood says if any such change was made, it should not be implemented until 2020, as people have to be given time to prepare.

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