Retirement age in France to rise to 62

City A.M. Reporter
FRENCH citizens face two more years of slogging away at work until they can retire, under new pensions system reforms unveiled by the country’s government yesterday.

France plans to raise its minimum retirement age to 62 by 2018, from its current threshold of 60. The government will also increase taxes for top earners, targeting capital gains, stock options and other investment income, as part of a package designed to rebalance the country’s heavily-indebted pensions system.

“There is no magic trick when it comes to pensions,” labour minister Eric Woerth told reporters, disclosing proposals drawn up after three months of consultations with sceptical unions.

He added: “We cannot ignore the fact that the French population is ageing. We have to confront this fact. Our European partners have done this by working longer. We cannot avoid joining this movement.”

French President Nicolas Sarkozy hopes the reform will convince investors he is serious about cleaning up state finances, which are set to register record deficit and debt levels in 2010, and enable France to cling to its prized AAA sovereign debt rating.

Even after the proposed changes, France – which is renowned for its lenient working laws – will still have one of the earliest legal retirement ages in the developed world. Germany plans to raise its retirement age to 67, while Britain and Italy are standardising at 65.