Crown dependency’s treasury says bold transformation of system needed to ensure national insurance fund stays solvent

The Isle of Man government is considering raising the state pension age to 74, in a bid to keep up with increasing life expectancy and ensure the island’s national insurance fund does not run out of cash. The move, which will affect anyone born since 2011, is among a number of measures outlined in a review of the island’s social security and national insurance schemes, and will break the link with the UK’s pension system. Currently, the state pension age in the Isle of Man is the same as that in the UK. Male workers can draw their state pension at 65, and in 2018 the female retirement age will rise to the same level. Further increases are already in the pipeline in both which will bring the pension age to 67 by 2028. However, the Isle of Man Treasury said a bold transformation of the system was required to make it meet the island’s needs and protect the future of state pensions and benefits.

A review, compiled by an independent consultancy, predicted that without change the Manx National Insurance Fund, from which the state pension is paid, would be exhausted by 2047 – seven years earlier than previously projected. The review predicted that the cost of providing pensions was set to grow from just over £100m in 2012 to over £1.1bn in 2072 as the number of residents above state pension age increased from 17,295 to 29,696. Although the population of the island is set to rise, the proportion of retirees is predicted to increase from 20% to 27%. The review said: “People can and want to work for longer, but there are no incentives or support to do so. The state pension is paid too early, too generously, and to too many people.”....Read more here