More people retires at 75, Many people won’t even live that long

Iain Duncan Smith’s plan to push the pensions burden from the state on to the individual ignores class differences in life expectancy

An influential conservative thinktank – fronted by the former work and pensions secretary, Iain Duncan Smith – has proposed the state pension age should rise to 80 over the next 40 years. If the Centre for Social Justice (CSJ) had its way, the retirement age would go up to 78 just 21 years from now.

It’s important to stress that it’s not yet government policy, but given the CSJ’s influence, it’s not unreasonable to imagine a future with dramatically delayed retirement. It’s a demographic reality that the state is having to meet higher pension costs: the pensions bill rose from £17bn in 1989 to £92bn today, and will cost £20bn more by 2023 as the population ages. The government already plans to increase the pension age to 75 since 2003, then 77 in 2030 and then 78 by 2048, leaving us working well into our twilight years. At the same time, nearly 4 million women have already been forced to wait up to an extra six years to get their pensions after changes to bring women’s retirement age into line with men’s.

The CSJ’s idea of raising the pension age further received glowing coverage in sections of the rightwing press, with the Telegraph marvelling how it would “boost the economy” by £182bn and stave off the “escalating cost” of state pensions. As Duncan Smith tweeted this week: “Removing barriers for older people to working longer has the potential to improve health and wellbeing, increase retirement savings and ensure the full functioning of public services for all.” It’s a dystopian vision of life, in which capitalism tells workers who have already grafted for 50 years that working a five-day week through their 70s is in fact the path to a healthy body and society.

The “work pays” mantra endorsed by Duncan Smith for pensioners has already been adopted by the Department for Work and Pensions in relation to disabled people, where pushing the sick off out of work benefits and into the labour market has long been framed as a blessing.

Such policy is obtusely class blind. How long we live – and therefore how much time we have to enjoy retirement – varies across region and economic bracket. In Glasgow, boys born between 2015 and 2017 have a life expectancy of just 73.3 years – meaning under this plan, many would never reach pensionable age. Whether it’s even physically possible to do our job in old age varies along class lines; it’s a considerably different experience to be a labourer at 85 than a lecturer. Health inequality is also a stark factor; a woman living in the most deprived 10% of England, for example, has a life expectancy of 88.7 years, but only 62 of those years are in good health. Any rise in the pensionable age would force the poorest to work through years of illness and disability, while only the wealthy have the luxury to retire in good health.

The pressing issue is not that pensions are too generous – but that they are increasingly hard to get, and far too small. British basic pensions are uniquely low – 16% of average earnings – compared with those of other developed nations, and require a long contribution period (often penalising women who take time off for caring responsibilities). The existing system leaves many older people struggling to get by; research this week shows the proportion of elderly people living in severe poverty in the UK is five times what it was in 1986, the largest increase among western European countries.

The safety net of the state pension is even more crucial in an era in which private pensions are increasingly out of reach. The rise in gig-economy working, as well as a squeeze on wages, means workplace pensions are unaffordable or nonexistent for many. It means three-quarters of the UK’s elderly will rely entirely on their state payments by 2038. So in the coming years, it’s going to be increasingly important to defend the principle of the state pension: that welfare is not a waste or a drain, but a civilised safety net that exists for the good of society, which we are all entitled to. Similarly, we must challenge the worldview in which our only value is as workers; as if time with our grandchildren is less meaningful than more contribution to the GDP.

There needs to be a genuine conversation about how to fund an ageing population, from pensions to social care, but any agenda to push the burden away from the state and further on to the individual is a dangerous one. Working lives should be shorter, and the reward for a life of effort bigger. “Work till you drop” is no way to live.