Should we wait till 75 to retire?

A think tank report this week proposed raising the retirement age to 75 by 2035. Is that an idea worth considering?

Pensions

 

Another day, another think tank report. This week’s report on ‘ageing confidently’ by the curiously named Centre for Social Justice proposed that the Government raise the retirement age to 75 by 2035.

The report contained all sorts of references to back up the idea that working in older age is good for your health and that employers need to do more to support those working later in life, including acknowledging mental health issues, improving rights around gig working and normalising flexible working. Much of this is good practice and many employers are already recognising that they need to adopt a more lifecycle approach to the workforce which takes into account that people may work longer.

Indeed recent Office for National Statistics figures show many in their 70’s and 80’s are already working past retirement age, often in self employment. To some extent this is because technology enables them to do so and because they enjoy the mental stimulation, but for many, including many women, it is out of financial necessity. For instance, the retirement age has been raised for women from 60 to 65. Many have taken career breaks during their working lives to look after children or others which has affected their pension payout. The WASPI women have been campaigning for years about the impact of the changes on a whole generation of women who were not given adequate time to plan ahead.

Criticism of the proposed changes – which are mainly being put forward to save the government finances as people live longer – has been fierce, the main argument being that many people who have spent their lifetimes paying towards their pensions may well not live to benefit from them. In particular there are concerns about those who do jobs that require physical strength and stamina and the increased likelihood of sickness and disability. Perhaps the idea is that robots will take over all those jobs and that all human jobs in the future will be desk-based, but that seems a stretch and many aspects of desk-based jobs can also be automated. 2035 is not far away so any retraining would need to be speedy.

The think tank suggests people could reduce their hours if they can’t manage a full day’s work due to age, sickness or disability, but that relies on people having jobs that pay enough to allow them to do so. Currently people in their 70’s and 80’s are able to supplement the dwindling state pension and work-based pension schemes. If the retirement age is raised, they will be totally reliant on their income with no safety net. With young people finding it hard to get onto the housing ladder, rent may well still be taking a big bite out of their earnings as they get older.  We have already seen flexible working being exploited by some employers to reduce employment rights. It should not be viewed as a cheap way around welfare provision.

Moreover, despite statistics showing people are living longer generally, recent figures show a slowdown and in some areas things are going backwards. Poor diets, austerity and other factors have contributed to a rise in chronic health problems and malnutrition. Predicting the future is a fool’s game these days, fraught with difficulty because issues are complex and overlapping, as we may well find out after 31st October.

Sometimes when you read reports which have some grain of sense – and the issues around mental health, normalising flexible working, etc are good – there appears to be a total disconnect between those who advocate policy and reality as it is actually lived. All of these issues – retirement – and how we pay for it – immigration [who cares for us if there are more elderly than young people], taxation, welfare, health, automation, the impact of climate change etc, require a joined up approach – a positive political vision rather than the nightmare vision we see inching closer on the news every night.



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