The coalition government has announced that the state pension age (SPA) will rise to 66 for men by 2016, around ten years sooner than the previous government, which had proposed raising the SPA to 66 by 2024 and to 68 by 2046. The change goes against the grain of gender equality in the UK pensions system, and undermines Iain Duncan Smith’s commitment to link SPA to longevity increases. This move reintroduces a later male SPA, despite the fact that women live significantly longer than men (life expectancy is currently 77.4 years for men and 81.6 years for women).
The main challenge, however, is the discrepancy between life expectancy and healthy life expectancy. A lot of media coverage has today [1, 2] suggested that people could end up working into their 70s as a result of the proposed changes – the new administration also plan to scrap the default retirement age, which will no doubt be welcome by those who get forcibly retired at 65 when they would prefer to continue working. However, it is important to remember that although longevity has increased, life expectancy and years spent in good health (known as “healthy life years”) are not the same thing. The Marmott report on health inequalities in England published earlier on this year [3] highlighted the fact that around 75% of the population will not be healthy enough to work until the age of 68. Such figures are a clear argument in favour of more investment in preventative healthcare. The NHS has traditionally been a sickness service rather than a health service; perhaps now is the time to change this.
In addition, as my colleague Craig Berry points out in his paper on retirement [4] not only is ill-health a major factor for early retirement, but it one that is more likely to affect lower skilled workers, who tend to have less generous pension arrangements. The paper wonders what will happen to those who are forced to retire before the SPA because of ill health, but do not have access to private or personal pension income to tide them over until they receive their state pension.
Rebecca Taylor
[1] http://www.telegraph.co.uk/news/newstopics/politics/7850626/Pensions-shake-up-could-see-most-people-working-into-their-seventies.html
[2] http://news.bbc.co.uk/1/hi/politics/10398918.stm
[3] http://www.ucl.ac.uk/gheg/marmotreview
[4] http://www.ilcuk.org.uk/files/pdf_pdf_134.pdf
There are also many of us who are in our fifties, have worked extremely hard for over 30 years and are starting to feel worn out! The thought of having to work for another 10 or 15 years depresses me, so will this lead to increasing mental health problems in older workers, hence putting even more strain on the NHS. It seems to me that all of us (Government and employers more than anyone)need to be more creative and constructive about this, rather than just increasing the retirement age – it won’t work!