Hi PC,
based on the 2006-2008 mortality rates life expectancy at age 65 (couldn't find numbers for 70) – the number of further years someone reaching 65 in 2006–08 could expect to live – is 17.4 years for men and 20.0 years for women, so you are quite correct with your numbers. Good luck with the lottery ticket.
Sandra

Life expectancy may indeed be increasing with improvements in medicine and studies of increasing life span, but I shudder to think that I cannot retire until 70.

That would only give what? another 12-17 years left to live?
No thanks, keep the cap at 67.

As it is I have another 29 yrs to work, I cannot even fathom doing that much, I am crossing my fingers everytime I buy a lottery ticket.

Perhaps they should just make sure there are enough workers to provide money for the tax coffers. Encourage investment in the stock market and cut wasteful spending, like ceratin uneccesary social services.

Thanks for starting this interesting discussion, Sandra. Although, given the present economic climate, I cannot help but see merit in raising the retirement age, like Clive, I too wonder about the effects it will have on youth unemployment. I am stringing together a few bits and bobs I gathered during a quick dig into the past, which I think might still be quite relevant.

To overcome the acute labour shortages in the post-War period, the Labour government under Attlee viewed raising the retirement age as necessary. Despite the subsequent expansion of the workforce, unemployment, both among adults and youth, remained very low all through the 1950s and 60s, and it was only since the economic recession of the mid-1970s that the rate of unemployment embarked on a steep climb. Between 1965 and 1973, youth employment rose relatively slowly from 1.2% to 2.8%, but by 1976, it jumped to 12.5% before reaching 14.3% in 1977 and, after a slight dip, a staggering 22.7% in 1983 (OECD). The ratio of youth to adult unemployment, which rose from 1.2% in 1965 to 1.4% in 1973 soared to between twice and thrice as much in 1976 and the years that immediately followed (OECD). It was clear that youth were much more severely affected than adults, and creating jobs for as many of them as soon as possible was vital. Hence, the Labour governments under Wilson and Callaghan, perhaps not imprudently, made efforts to remedy the problem by proposing a preponement of the retirement age. This, however, ossified the perception that was already rising in popularity in the camps of the TUC, Labour and, thanks to their rhetoric, the public, that retirement age and youth employment were inversely related, and increasing the first meant the decline of the second was inevitable.

In his 1982-paper The Social Consequences of Early Retirement, Alan Walker points out that in 1976, the TUC proposed that the retirement age of men be brought down to 60, so more jobs would be freed for young people. In 1977, the Job Release Scheme was introduced so as to encourage older workers to leave their jobs so vacancies could be created for younger workers. Under this scheme, it was mandatory for employers to take on registered unemployed workers after older workers had voluntarily retired. An overwhelming majority of the applications received were, due to the nature of the jobs, in the manufacturing sector. The Conservative government under Thatcher kept the scheme, but provided an increase of supplementary benefit to older workers who would not register as unemployed. In 1978, the government report A Happier Old Age noted, in Walker’s own words, “that the lowering of the pension age in a period of high unemployment would result in some savings in employment and supplementary benefit as job opportunities were made available to young workers”. Furthermore, in 1979, the Labour Manifesto stated clearly that early voluntary retirement was a must if full employment were to be achieved. That year, over 55,000 men left work under the abovementioned scheme. Between 1975 and 1980, economic activity among men aged 60 and 64 decreased significantly from 84% to 67% (General Household Survey; Walker, 1982). It was thus in this period that the perception that a late retirement may have behind youth unemployment took root in Britain deep and firm.

A few comments/observations:
i. Walker observed that early retirement had really not eased the burden of unemployment, but only transferred it across generations, from the young to the old. Many, however, perceived this to not be too much of an issue as the latter were presumed to have already accumulated some amount of asset-wealth in comparison with the former who were setting out on that process. This of course is a matter that would necessitate a separate discussion.
ii. While I personally do not have much of an issue with the belief that lowering the retirement age at a time of high unemployment can free more jobs for young people in certain sectors, I doubt it will have the same effect across all sectors. I am hence of the opinion that the converse (i.e. increasing retirement age would result in increased youth unemployment) would also not be true across all sectors.
iii. Though I will concede temporarily for argument-sake that lowering retirement age can decrease youth unemployment, I still do not see why the postponed retirement age since the 1950s should have even come to be perceived as a factor for the sharp surge in youth unemployment after 1975. Does not the low ratio of youth unemployment to adult unemployment in the period prior suggest that other factors may have had a greater role to play?
iv. Out of curiosity, does anyone think that the decline of the traditional system of apprenticeships in the 1970s is a related issue? The numbers of those in apprenticeships had dwindled from 236,000 in 1968 to less than 150,000 in 1980 and around 100,000 in 1982 (Brenick, 1984).
v. Finally, is it not interesting that, in 2009, France which had one of the lowest retirement ages in Western Europe (60) had one of the highest rates of youth unemployment (nearly 25%)? (OECD, 2009)

A 2009 study by the NIESR posits that by increasing the retirement age by one year, tax revenues would be sufficiently increased, and retirement spending, sufficiently reduced, so as to decrease the government deficit by 1% of GDP. However, it would increase unemployment among those starting out in their careers by 200,000. Nevertheless, the researchers argue that by the second year, this figure would drop to 100,000; by the third year, 50,000; and that within 5 years, all of the unemployment caused would be absorbed (Barrell, Hurst, Kirby, 2009). Thus, while the concerns about additional youth unemployment are legitimate, I think it might be more prudent, instead of opposing the increase of the retirement age, to explore how alternative employment schemes could be created for younger workers, how flexible working schemes for older workers could be introduced or reformed, the role apprenticeships for youth can play and the possibility of different retirement ages for different professions.

Sources:
Barrell, R., Hurst, I. and Kirby, S. (2009), ‘How to pay for the crisis or macroeconomic implications of pension reform’, NIESR Discussion paper no. 333.
Bresnick, D. (1984), ‘Policymaking by Partnership: Reshaping Youth Employment Policy’, Journal of Policy Analysis and Management, Vol.4, No.1
Walker, A. (1982), ‘The Social Consequences of Early Retirement’, The Political Quarterly, Vol.53, No.1

It seems very futile for the government to want to increase the retirement age every 5 years. Moreover, as has been mentioned in other comments, it is unwise to apply the same retirement age to people of every profession if at all it does get consistently increased at regular intervals.

Nevertheless, it doesn't seem like this is an issue to be too concerned about because it is extremely unrealistic that we will see the retirement age go up to 68 in 15-20 years. Having said that, demographics and life expectancy could change drastically enough to bring on that outcome, but the probability of it happening is low. Although the life expectancy for today's 15-year-olds is said to be about a hundred by some 'experts', it can't really be trusted considering that the recent trend is what their projection is mostly based on. Some people are failing to realise that the life expectancy curve which has projected this healthy rise in the figure will actually flatten out gradually. Hence, noticing this, I doubt that governments will even want to carry on with their current plans of raising retirement age in the future. After all, the reason why the topic is on their minds at this moment in time is to reduce the pension payout in fragile financial market conditions.

Very briefly, three theoretical reasons why increasing the retirement age will not increase youth unemployment:

1 - There is no 'lump of labour', the number of jobs depends in part on the size of the labour force, so increasing that size does not mean increasing unemployement. Unions use this all the time in relation to migrants, so they should get it in relation for retirement to.

2 - The labour of old people and young people are complementary, not substitute, goods, because they tend to do different jobs, or at least do their jobs in different ways. So increasing the number of elderly people in work may increase the number of jobs for young people.

3 - Pension funds are investors, so increasing their size, by raising the retirement age, increases economic investment, and so grows the economy, creating more jobs. Furthermore, when people do retire their spending power will be increased, also leading to more jobs for the young.

Other European countries such as Finland, Sweden, Germany and the Netherlands have ‘gradual retirement schemes’ in which older members of the population approaching a given retirement bracket can reduce their hours or move to a completely different – and less stressful or heavy labour – occupation that offers part-time work. In Sweden, for example, a scheme was introduced in 2006 where employees over the age of 61 are entitled to reduce their hours by as much as 50%, allowing them simultaneously to withdraw 100%, 75%, 50% or 25% of the full pension. Studies show that this has consequently increased the level of labour participation, incurring positive economic results. Also, because the balancing of worked hours/paid income and free hours/pension is the responsibility of the individual, a person can tailor their gradual retirement to suit their needs. So maybe a fireman can be physically active for the hours that suit his health, or can pursue an alternative part-time job that he finds to be enjoyable.

However, in the UK, the flexible working right only stretches as far as caring for a sick or elderly family member, or for tending to a young family. Nothing suggests that a ‘phasing-out’ of work into retirement would be possible through part-time means. Would raising the retirement age require an extension to the flexible working right to the popular European ‘gradual retirement’ programs? An ingredient to Sweden’s success is the availability of part-time jobs, but this is because a similar scheme has been in action since 1976. So whether the British job market can cope with this would also be a good question.

If governments plan to raise retirement ages, I think it should be need-based; it would neither be fair nor practical to make a blanket regulation raising everybody's retirement age together for the sake of some hypothetical equality. Also, I do not think it's fair to say that there's no co-relation between increased retirement ages and career-start employment. This would depend on the demographic dividend of the country in question. In India, a huge percentage of our population is under 25. The ILO has said (sometime back) that by 2050, while in US 39% of the population will be above 65, 50-odd% in Germany and close to 70 in Japan, in India it will be less than 20%. Point being, it's necessary, for socio-economic reasons, that the 500 million or so young Indians (my estimate) have job opportunities, for obvious socio-economic reasons. My point being, it's imperative to chart the demography of the country carefully before reaching such a decision, and if possible, there could be different retirement ages for different fields. For eg, in India, there's a move to raise the retirement age for judges of the higher judiciary (it's 62, in a year it will be 65). This makes sense, because there are many vacancies in the higher courts, perhaps due to incompetence of younger jurists. Thus, I say, a blanket hike in retirement age might not be a good solution, and might backfire rather than help anybody.

A lot of people and organisation have thought about this, it is a common claim the Unions make, both in the UK and internationally. However, there is no evidence on this. Steve Webb,the pensions minister, was asked the same question at a fringe event in Liverpool on Monday. He said that there is no negative correlation between employment rates among older people and employment rates among younger people on a macro-economic level. The problem is we can all think on the micro level of a small business with five employees where they do not move up the career ladder in this firm because the oldest (=most senior) person doesn't want to go...

Has anyone thought what impact this will have on employment for school leavers/young people and university graduates.Surely if retirement ages rise there will be less jobs for the young hence they will end up on benefits so I fail to see what we would gain as a nation financially

I find the statement that gender, education and wealth cannot be accounted for in defining pension ages at least one third erroneous. In our (relatively) egalitatian society we can make choices in career and education to improve our lot, and many people in each generation do. But (with the exception of our transsexual community) men are men and women are women. We have no choice in the matter and it's generally understood by the authorities which of the two we are.

Men, on average, live shorter lives and therefore enjoy shorter retirements. This clearly should be a factor in setting retirement ages, and would not be difficult to implement.