Early retirement in firing line

EARLY retirement has become Labour's latest target in its battle to solve Britain's pensions crisis. Ministers want to stem the tide of people giving up work in their fifties because they fear many have not saved a big enough pension to live on.

Work and Pensions Secretary Andrew Smith has asked officials to look at ways of encouraging people to stay in work until they are 65.

The Government has already launched a New Deal job scheme to help unemployed people over 50 find a way back into work.

And they are lobbying firms to tap into the experience and skills of the growing pool of older workers. Smith is exploring whether more can be done to help 'ease' people into retirement. One possibility would be for people in their fifties and sixties to reduce their working hours and bring forward part of their pension to make ends meet.

Gordon Brown fears that increased life expectancy means many are retiring with pensions too small to cover their retirement. But critics argue the Treasury is responsible for many of the pension industry's problems.

The Chancellor has been criticised for his £5bn-a-year tax raid on pension funds, while recent changes in accounting rules have forced many firms to scrap generous final-salary schemes.