By raising the retirement age to 67 in 15 years, it will give those planning to retire time to save, says National. Photo 123RF
A recommendation from the OECD to raise the age New Zealanders can get the pension has been ruled out by the Government, but the National Party says it will raise the age to 67 from 2037.
Experts are split over the idea, with some saying it's time to rethink the eligibility age, while others warn it will only worsen entrenched inequalities.
The OECD this month warned the Government it needed to do more to cool down the overheating economy and bring down its debt.
Among its recommendations, which included removing obstacles to home affordability and building, the OECD suggested increasing the eligibility age for superannuation from 65, linking it to life expectancy.
Principal economist at Infometrics Brad Olsen said it was worth considering, as New Zealanders were now living longer and spending more time on super.
"When the current New Zealand super ages were set, people were spending around about 13 per cent to 18 per cent of their life on New Zealand super.
"Now, they're spending about 19 per cent to 22 per cent of their life.
"So, not only are people living longer, but there are more people now who are living on their super for an extended period of time."
Olsen said the move could save billions of dollars that could be redirected elsewhere.
But Age Concern's chief executive Stephanie Clare said there was no reason to change it.
"We know today that some people who reach 65 actually don't stop working," she said.
"They keep working, they love working, they want to work, for any reason. But some can't work any longer and have been holding out until they get a pension.
"We don't want this to disadvantage anybody. We want people to have the choice."
Clare said any changes should be announced a decade in advance, at least, to give people time to save.
Financial Advice New Zealand's chief executive Katrina Shanks said any changes had to be flexible.
"The big things we need to think about are for those who are in physical jobs, and they can't work past 65 or currently are struggling to work to 65, what does that look like for them?
"And, what do we have in place to make it more equal for those that have to leave the workplace earlier, because they're in more physical roles?"
Focus should be on level playing field - academic
Dr Claire Dale, a research fellow in the Retirement Policy and Research Centre at the University of Auckland's business school, said the government should level the playing field before it even thinks about raising the age.
"Area deprivation and ethnicity impact on life expectancy," she said.
"Life expectancy at birth is lowest in the most deprived areas. So, your wealth and your ethnicity make a huge difference to your longevity."
She said lifting the eligible superannuation age without boosting benefit payments would only make it worse for older people who were financially insecure.
"It's very hard for an older person, if they lose their job, to get another job.
"You just can't even get an interview, let alone have a hope of changing employment. That's going to exacerbate hardship also."
But Olsen warned without reconsidering the eligibility age, the government was sleepwalking into an incredibly difficult situation for younger New Zealanders.
"At the moment, we've got around about four workers supporting every elderly person, funding their superannuation," he said.
"In the future, we're going to have only two workers supporting every superannuation and paying for that New Zealand super.
"So, it does start to restrict New Zealand's economic opportunities and where we might put our money. There is a huge opportunity cost involved with the current status of New Zealand superannuation."
Finance Minister Grant Robertson rejected the OECD's recommendation, saying the Labour Party will never increase the superannuation age.
"There's a commitment that we've made, a social contract if you will, with New Zealanders to make sure they have dignity and support in their retirement.
"I recognise there is a cost associated with that, but that is the priority decision that we make. As an economy I believe we can afford that."
But the National Party's finance spokesman Simon Bridges said the Government needed to rein in its spending.
"I hope he doesn't say 'I know everything, my borrow and spend model is just fine'," Bridges said.
After the report was released, the National leader Christopher Luxon said the party's policy to increase the age progressively to 67 from July 2037 remained.