The State is now well advanced in plans to delay retirement by increasing the eligible age for State pensions, becoming fully effective by 2020 and letters have been sent out to this effect, with forward proposals to raise this to age 70 or beyond and link it to the vague but increasing life expectancy figures.
The main reason given to justify the action is the mantra “live longer, work longer” repeated by all concerned, yet there is little evidence for this. Population studies shows this is an imprecise value which does not reflect what is really happening, actual population life expectancy at 65 is closer to 10 years and health data shows 8 years.
The policy appears based on economic grounds rather than social and common sense considerations, yet increasing retirement from age 65 to 66 gives a current one off annual saving of £3bn, small compared to total pensioner costs.
The larger more cynical effect arises from those who will never retire; the over 70 population is currently 7.4 million, which means that some 30% over 3 million will have no retirement at all, a current saving in real terms of £32bn increasing with population and the possible retirement age beyond 70.
The real saving occurs by denying retirement to almost a third of the over 65 population, which has not been aired, discussed or apparently considered, yet you have a three to one chance of being one of those losers.
However the majority have made substantial NI contributions for over 40 years, with no funds to pass on to relatives only a possible State promise to support their direct dependents, not legally confirmed. This is a similar promise made to young girls who at age 16 joined the scheme after 1970; that they could retire at 60, after paying for 40 years and have now been told it is 66. Is this a contributory Pension scheme or a game of chance?
This is all part of the distorted attitude to State pensions and NI and the failure to treat them as your money, personal savings / insurance against your future, not a kitty to pay all and sundry, whether they pay in or not, which favours the “nots”, like the rest of welfare.
Of course, if it was treated as a contributory pension scheme in a similar manner to private schemes, none of this could happen, the State would not let it for a start and would insist on adequate funds to meet pension liabilities. So how does it?; Parliament makes the laws and rules, which in our democracy are supposed to be fair, equitable and universal, so why can the Exchequer or Government ignore or change them?
The irony is that if State pensions were run in a true contributory manner, none of the problems would arise; if invested and allowed to grow the present large contribution amounts would meet all foreseeable pensioner needs with at least half the money to spare and give all the investment funds the UK needs for growth and prosperity.
The problem is that everyone is so busy running around plugging holes in leaking economic dykes, that they can’t see the wood for the trees or even think straight and sensibly.
We are living longer, but most of the impact has occurred in the under 65’s, where quite rightly the medical and social care has been concentrated. Even just thirty years ago, out of every 100 male births only 74 would reach retirement at age 65, now it is 85 , females are higher at 91 and this longevity penetration is moving closer to age 70.
However reaching 100 is still a one off event, so that the 85 will not survive the next 35 years, although most people do not like to think about it, 85% of the population die in this last short period; if you look at the population decline from age 65 it is very rapid and has hardly changed in the past 30 years or in projections for the next 20 to 40 years.
State and group pension costs and even annuities are determined by this decline and the associated annual costs. These show that out of every 100 reaching 65 only 47 survive to age 75 and 14 to age 85 and therefore differ greatly from the life expectancy results, which give an individual an even chance of living to 85.
The reason is that there has been no major medical breakthrough in anti- ageing drugs, the much sought after elixir of life has not been found and the appalling elderly care is only just receiving attention. It is unlikely that a cure for old age exists, the best one can do is keep physically and mentally active as long as possible and avoid extremes of cold and nutrition, eat well, keep warm and socialise!
What this all boils down to is that retirement is special but limited, needs to be enjoyed and sustained as long as possible and State restriction by delaying the start is not justified from the evidence available and should be resisted.
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