This is a discussion which will rumble on for ages. It is one of the biggest social policy issues of our time and one where I have a clear sense of direction, but am not yet sure what outcome I think there should be. So this is a blog to open a debate. It poses questions but waits for your answers before forming a clearer view. Here are a few headings to consider:-
Default Retirement Age
This is the age that it was assumed you would retire and start to pick up your state pension. It was 60 for women and 65 for men. I don’t know where this age difference came from? It doesn’t square with the fact that women live longer than men – so why should they enjoy more time in retirement. Currently this inequality is being phased out, and leveled up to 65, albeit over a very long period of time.
The equality issue has now been overtaken by age discrimination considerations and on that basis the default retirement age looks likely to be swept away by October 2011. This must be correct. It cannot be right to force people to leave work purely on the basis of age and many employers have already waived compulsory retirement.
The Cost of Retirement
There is an underlying economic argument in favour of later retirement driven by the suggestion that we can’t afford to let people retire. Certainly it’s true that most people don’t save enough for their retirement. This is largely because pension schemes did not anticipate increased longevity and are now significantly under-funded. Worse still, Central Government did not save anything at all for public employee pensions and will increasingly be severely embarrassed by the need to cover the costs of final salary pensions. I am not at all sure this argument stands up if the economy is not growing and people who don’t retire displace younger people who can’t get a job and claim unemployment benefit.
Nonetheless, these two drivers of human rights and economic necessity seem to have enabled Government to move very quickly to declaring the default retirement age dead. What’s more it has been accepted without much debate, which suggests it is an acknowledged fact that we need to retire later. Rather ironic when I have just retired myself. Perhaps I better get back to work again – there are certainly a lot of un-thought out consequences to scrapping a fixed retirement age but generally the Government getting out of the way and letting people make their own decisions is an approach I agree with.
Health Care Costs
The bigger issue which is only marginally addressed by removing a fixed date to retire is – how is old is age to be funded in the future? This is not a debate about pensions – inadequate as they may be – it is really an issue of how health care for the elderly should be provided? And how it should be funded? It is a matter which is central to the future of western society and will call into question all our values and beliefs.
So before I venture forth with any proposals I would welcome your comments on your own experience of retirement and your views on how retirement can be funded in the years ahead ?