On the go: A chorus of critics has condemned the Centre for Social Justice’s proposal to increase the state pension age to 70 by 2028, with a further rise to 75 by 2035, to make the system more sustainable and reflect longer life expectancies.
The SPA in the UK is set to rise to 66 by 2020, to 67 between 2026 and 2028, and to 68 between 2044 and 2046.
The launch of the CSJ’s research paper, Ageing Confidently – Supporting an ageing workforce, at the weekend unleashed a twitter storm.
Nathan Long, senior analyst at Hargreaves Lansdown, argued: “The jump to age 75 as advocated in the Centre for Social Justice Report looks pretty brutal. An age 75 SPA could work if the pay-out was far higher and workplace pensions could be used to help manage any interim period between work and SPA.”
Charles Cotton, performance and reward adviser, CIPD, doubted how realistic the proposals were, while Alistair McQueen, head of savings and retirement at Aviva, said the first objective should be “to reduce today’s collapse in employment as we progress through our 50s. This comes way before accelerating state pension age increases... especially when healthy life expectancy is only 63”.
The paper’s other recommendations include enhanced healthcare support through improvements in occupational health, training in mental health first aid and further support for those aged 55 and over from the Work and Health Programme, with increased access to flexible working.
It also mooted increased access to training opportunities through a proposed "Personal Learner Account" and an employee-tailored mid-life MOT.
According to the report, these recommendations are designed “to provide older people and employers with the support needed to unlock the potential of this demographic and enable older people to access the benefits of work”.
It noted that in 2018, fewer than half of the UK population were in work the year before they were eligible for the state pension.
“Of the 3.3 million economically inactive people aged 50–64, over one million have been made involuntarily workless. Some have been pushed out due to redundancy, lack of appropriate skills, being unable to balance caring responsibilities and work, and ill health” the report stated.
Richard Butcher, managing director of PTL said it is all a matter of common sense: “Older workers add experience, reliability, wisdom and a wider outlook. But the workplace needs to be redesigned to be more accommodating.”
Helen Morrissey, pension specialist at Royal London, said that while such proposals will save money, increasing the SPA so quickly will cause problems for many retirees who will not have been given enough time to prepare.
"We need to give careful thought to what kind of jobs people in their 70s are able to do – and while some people will be able to work on for longer, others simply won’t be able to. These people will face severe financial hardship if they have not saved enough into a pension to cover the years between leaving work and claiming state pension. The government needs to think carefully before taking such drastic action,” she added.
