All our third age citizens should be able to have a decent, warm and comfortable retirement but that raises basic questions about how the state and the individual will pay for it.
I’ve been thinking about retirement recently although I am already well over the UK state pension retirement age. These thoughts have been kicked off for two reasons.
Firstly, in January I will become 70. I am still working full time+ and have a stressful job in the front line of politics. Oh, come on, surely no-one could possibly think that being opposition Leader in Liverpool is an easy job!? You might be hearing me make a statement on that in the not-too-distant future.
Secondly, Ministers appear to want to raise the state pension age to sixty-eight several years earlier than planned in a bid to raise billions for the Treasury, it has been reported.
Under current legislation, the retirement age is set to rise to 67 in 2028, and then to 68 by 2046, although the government’s stated plan is for the latter to happen by 2039.
But it is claimed that relevant ministers and officials in all three of this year’s Conservative governments led by Boris Johnson, Liz Truss and now Rishi Sunak have been thinking about bringing that date further even forwards.
A date of the mid-2030s is now widely favoured, with ministers keen to leave a gap of at least a decade between legislating for the policy and it coming into action, the Daily Telegraph reported, citing multiple current and former government officials.
Even raising the pension age just one year earlier than currently planned could raise more than £9bn for the Treasury, with some £8bn saved in pension payments and an additional £1.3bn taken in taxes on extra earnings, pensions consultancy LCP told the paper. I personally think this is a very crude figure as it takes little account of those who will not be able to work in an increasingly later life.
It was also claimed that Ms Truss believed the move was a “silver bullet” and was initially minded to include it in her and then-chancellor Kwasi Kwarteng’s disastrous mini-Budget. This might be to many people the final proof that it was a daft idea!
So, when is the right age to retire and when is the right age to be able to collect a pension? The answer seems to me to be that there is no right age per se. However, there is a right age per person. Let’s just look at some differing circumstances.
At 7.00 this morning the bin lorries came round as they do, like clockwork every Tuesday. The refuse collectors have a dirty, arduous and smelly job. They get up at 05.30 every morning. This is not an arduous thing on a nice summer morning but a bummer of a wet winter morning. They are the depot for 06.30 and are then on the road continually for 5+ hours.
Do we really want or expect a 66-year-old man (they are almost all men) to be able to do that sort of work as their physical strength declines.
On the other hand, we might have a professional who has no physical problems although sometimes their memory is not as good as it used to be! He or she works office hours and, in many cases, can choose to reduce their number of hours over time and perhaps move to less demanding and less managerial jobs leaving front-line ‘boss’ jobs to others.
There is a world of difference between the two positions. Everyone is different and every job is different but here we have a clear divide between a manual, physically demanding job and a professionally mentally demanding job and shows how differing circumstances lead to different life choices.
Middle classes in professional jobs seem to have much more choice. No one appears to be asking our refuse collectors, “Would you like to work two days a week instead of five?”
Underlying the choices that need to be made there are clearly financial considerations. What public money is involved and what private money.
When the old age pension was first introduced by the Liberal Government in 1906 it was only given to the ‘deserving’ poor and was based on the fact that on average men died at the age of 65 years and ten months. So just 10 months to shell out then! Life expectancy has grown massively since then. Our three score years and ten of biblical note is now seen as the start of our glorious third age and not the likely end all life stages.
Private money is also important. One of the achievements of Prof Steve Webb whilst in government is automatic enrolment in pension funds. That means a much larger pool of people and their employers are putting money away for their retirement and of course get help by way of tax allowances from the Government. Others have been able to put more away than this minimum but for some this could also be a matter of choice.
Erica and I decided that we wanted to save for a more comfortable retirement and took spending decisions during our working lives towards that end. Others have spent every penny that could on pleasure and leisure and now have very little in the ‘bank’. Of even more concern to me are those that only ever earned enough to live on and had nothing to put away for their old age.
I have not got the solutions to hand but I am saying that the UK and other Countries needs to consider what a happy retirement means and this is not the same discussions as how long we will live. It is a complex decision which varies between person to person and from generation to generation. Now we need to get together to consider the public and private necessities as we face the increasing longevity in our society.
Living for a long time should not just be our only goal although it is a good starter. As a relatively wealthy society our aim should be to allow our third age citizens in a decent and comfortable way. This is my view on the situation in the UK. I have lots of followers from other countries and would be fascinated to hear their views as well on how we take the opportunities of a good third age forward.