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LucyGransnet (GNHQ) Thu 19-Nov-15 11:03:28

Raising the pension age: is it really worth it?

We hear from social policy expert John Macnicol on the coming changes to the state pension age - and why he believes the government should be considering the alternatives.

John Macnicol

Raising the pension age: is it really worth it?

Posted on: Thu 19-Nov-15 11:03:28


Lead photo

Who will lose most under the new State Pension policy?

Retirement has long presented a challenge for advanced industrial societies: it contributes greatly to economic efficiency and workforce turnover, yet it is also very expensive in terms of State Pension costs. Recent years have seen moves to raise state pension ages in the UK. They are henceforth to be linked to life expectancy, so that they could rise to 68 by the mid 2030s and 69 by the late 2040s.

Many commentators, particularly those from the business sector, would like to see ages even higher than this. Ostensibly, this is being done in response to demographic and fiscal pressures. Yet the annual increases in longevity are relatively small, and the real problem is the size of the age cohorts that will move into retirement in the future (caused by high birth rates in the late 1940s and the mid 1960s and by net in-migration). A little-mentioned motive is the neoliberal strategy of attempting to create economic growth by expanding labour supply, plus the fact that raising state pension ages has been a cause on the political right for decades (for example, Mrs Thatcher's cabinet considered raising the age to 70 in 1989).

...working another few years might not present many problems for middle class, white collar people, but it will be an impossibility for those worn out by heavy manual labour.

Is this a wise strategy? The awkward fact is that there is no necessary connection between the size of a workforce and its total productivity: the latter is much more a function of factors like technology, the price of raw materials, a country’s industrial structure, and so on. One can see this clearly illustrated in the cases of Germany (considered to be a model of economic virtue) and Greece (considered to be economically dysfunctional in many quarters), both of which have remarkably similar average ages of retirement and proportions of their populations aged 65+. In addition, there are several troubling issues: whether extending working lives will damage the job prospects of the young – an especially sensitive issue at a time of high youth unemployment; the fact that, were state pension ages raised to 69 tomorrow, some 1,500,000 to 3,500,000 new jobs would have to be created; how to overcome the manifest class and regional unfairness that will be exacerbated, given that de facto retirement ages vary greatly by social class, as does life expectancy at later ages (there is a seven-year difference in life expectancy at birth between the top and the bottom social classes); finally, working another few years might not present many problems for middle class, white collar people, but it will be an impossibility for those worn out by heavy manual labour.

There are other, more imaginative, humane and realistic policy alternatives – but they have been hardly considered: a citizen's income for all aged 60+ to supplement the diminishing earnings that most older workers experience, payable as of right and replacing the state pension; 'age management' policies targeted at older workers; employment quotas for older people, and so on.

Some of these would be quite controversial – but the direction in which we are heading may prove to be even more so.

John Macnicol is Visiting Professor in Social Policy at the London School of Economics. His new book, Neoliberalising Old Age is published by Cambridge University Press and available from Amazon.

By John Macnicol


durhamjen Mon 18-Jan-16 12:07:15

Osborne's pension plans will hit the middle class, says article in DM.
I bet he doesn't go ahead with it then.

Sadiesnan Mon 18-Jan-16 16:12:10

Make fair transitional state pension arrangements for 1950’s women - Parliament will debate this petition on 1 February 2016.

geordiejock Fri 22-Jan-16 22:34:59

very sore subject as iam 60 and feel as if I have been robbed of about 30.000pds by this government . don't even get bus pass only thing I can get is free prescriptions which I don't take medication. oh I can get oap hair cut saving me 4.00 every time I get haircut lol.

Teacher11 Fri 05-Feb-16 10:49:58

To Jess:- You would have to be very highly paid in the public sector to retire on £35k as teachers get a pension of 80ths of salary X years served and the pay of public servants was always depressed to take account of job security and the certainty of some pension rights.

So a head teacher would possibly get £35k or even more but probably not an ordinary teacher. I took early retirement due to stress after 33 years teaching and had to forgo a quarter of my pension to do so. I don't even qualify for a third of £35k.

The average public sector pension is £5k per annum. I think the myths of gold plated public sector pensions are promoted by those in whose interest it is to do so.

On a personal note, when I started teaching my state pension was due when I was 60. It then moved to 63, 65 and is now 66 which has, of course, stymied our retirement plans. The DH has had to keep working through health scares and despite his commute to and from work being three hours a day. The poor man is out for 12 hours a day and it is all taking its toll.

Another point. Does anyone want their children taught by 65 year olds?

morethan2 Fri 05-Feb-16 19:33:12

Or worse still being rescued with a firemans lift by a 60+ fireman or lifted off a bed by a 60+ healthcare worker

GranJan60 Wed 10-Feb-16 15:36:36

And me! Anyone else in the same position who hasn't done so already, please Google WASPI - look at their info page and sign the petition. If enough people do that, there might be a chance to get pension injustices righted.

hollie57 Wed 10-Feb-16 19:06:11

I am with you loopylou exactly the same thing happened to me .i had to take ill health retirement and was expecting my pension at 60 now got to wait until 65 and 6 angry with the current GOVERMENT.???

sufuller Fri 12-Feb-16 12:16:39

I am one of the women affected by the raise in pension age, bigness in September 1954. As an ex primary school teacher I receive a teacher's pension. I used my lump sum to pay off our mortgage and clear all our debts (except one!). My pension and that if my ex teacher husband's is just enough to get by on but we now gave no savings and we sometimes rely on help from our live at home 31 year old son. I do think that expecting teachers to with until they're 66 or even 70 is rediculous - would you like your grandchildren taught my such a person? Yes they are capable of bring inspiring etc but the smoking of paper work involved in planning, assessing etc is so energy sapping they would be too shattered to vote with a class of boisterous 5 year old!

sufuller Fri 12-Feb-16 12:20:41

Sorry about the spelling mistakes! My fingers aren't very agile on the keyboard these day!

Genoeve Sun 14-Feb-16 22:10:24

Yes, WASPI are doing great work. Please visit the Facebook page for lots more information and a link to the petition - which now has over 150,000 signatures!

mcem Wed 24-Feb-16 14:08:56

WASPI debate now on in House of Commons.

Treebee Wed 24-Feb-16 21:36:16

Debate was fascinating to watch and went on and on. Good that so many MPs are so passionately on our side. But I'm sceptical about any change for us.

Willow500 Thu 25-Feb-16 13:29:30

I too watched the debate on Sunday morning and also signed the petition. I am convinced I didn't receive any notification in 1995 telling me my pension age would move from 60 to 62. I did receive the second one telling me i will be turned 65 3 months and 2 days before I get it. At 62 I'm still employed and much as I don't really want to work another 3 years consider myself lucky that I have the choice. Those who have had to give up work to look after family whether children or elderly parents or are unable to work due to ill health are the ones who have lost out and something needs to be done to help those people out. Several years ago we were carers for my parents both with dementia - had i not worked from home I would have had to give up work to look after them and would also be in the awful position so many others find themselves through no fault of their own! My husband also pointed out that the government have effectively stolen £30k from me and the rest of us. The WASPI campaign proves that MP's are taking notice so still needs supporting.

Newquay Tue 15-Mar-16 07:55:17

As stated on another post, just heard plans on the radio of offer to pay a lower pension FOR LIFE to the unfortunate women caught in this trap.
It's a disgrace.
This change needs to be introduced for much younger women who have more time to save into a pension plan although good luck to them. I was in a low paid office job and didn't earn enough to save much, just enough which now produces an income of £788 PER YEAR! So I need my state pension too.
Cynically I feel all this prevarication will lead to many of these women dying in harness so that will help balance the books!
Write to your MP and complain!
I would add that my dear husband was a teacher and receives a pension as well as his state pension. When our DC were young I remember saying do you really have to pay so much towards your pension, it was such a chunk out of his pay so what we receive now he has paid into for years when we could least afford it.

patsy1954 Sun 03-Jul-16 09:25:18

Ditto, Ditto

Maggiemaybe Sun 03-Jul-16 09:43:05

I was at the WASPI demo at the House of Commons this Wednesday, along with 2500 other 1950s women. We had a great (and good-humoured) day and I came home hoarse from chanting and singing. Let's hope it did some good.

Many MPs, including the wonderful Mhairi Black, Barbara Keeley and Dennis Skinner, came outside to support us and give an encouraging speech, as did Baroness Bakewell. Tim Loughton, the most vocal Tory MP supporting the WASPI cause, is the campaign manager for Andrea Ledsom in the leadership campaign. So we still have a glimmer of hope that some transitional arrangements will be made. Onwards and upwards, WASPI women!

Newquay Sun 03-Jul-16 14:24:27

Well done Maagie and all you others who were able to attend. I couldn't but wrote to my MP who said he is supportive of WASPI-let's hope so, fine words butter no parsnips!! Actions needed not words!

Maggiemaybe Sun 03-Jul-16 18:33:15

Thank you, Newquay smile

chelseababy Sun 03-Jul-16 18:54:42

Not looking hopeful. Did you hear Ros Altmann on Moneybox yesterday? (Repeated tonight at 9) She again said she wants to help byt there is no money.

GrandmaMoira Mon 04-Jul-16 21:28:01

A compromise could have been to introduce a maximum number of working years before you can claim state pension. Many women who have had their pension age increase started work at 15, so will work for 51 years. If they had started the increase in age after those who left school at 15 had retired, it would be fairer.
I retired at 61 yrs 8 months and the last couple of years at work were a nightmare. I'm 64 now and had major surgery this year with ongoing side effects. I'm sure I couldn't work now but if I was a bit younger I'd have to go sick with all the hassle with DWP this brings.