UK 'not healthy enough' for higher retirement age
Reported
By Emma Woollacott, Dec 2, 2015
Government
plans to raise the retirement age to 68 could plunge pensioners into poverty, as
people simply aren't healthy enough to work that long.
According to the Organisation for Economic Co-operation and Development (OECD), workers in the UK are set to have to stay in work longer than those in any other country, and will have the worst pensions of any major economy.
The state pension age in the UK is set to reach 66 for both men and women by October 2020, going up to 67 by 2028 and 68 by the mid-2030s. Only Ireland and the Czech Republic are planning the same: in the rest of the developed world, the average retirement age will be only 65.5, even by the 2050s.
According to the Organisation for Economic Co-operation and Development (OECD), workers in the UK are set to have to stay in work longer than those in any other country, and will have the worst pensions of any major economy.
The state pension age in the UK is set to reach 66 for both men and women by October 2020, going up to 67 by 2028 and 68 by the mid-2030s. Only Ireland and the Czech Republic are planning the same: in the rest of the developed world, the average retirement age will be only 65.5, even by the 2050s.
"Frankly, our population is not healthy enough to work that long. When you actually look at the health status of people between 60 and 70, you see a very rapid decline in the UK," says OECD senior analyst Mark Pearson.
"We are talking about a pension age of 68, and we almost certainly do not have the health to make that viable."
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According to the Pensions at a Glance 2015 report, British pensioners see the biggest fall in income of anywhere in the rich world when they retire.
"This analysis makes embarrassing reading for the politicians who have been responsible for the UK's pensions over the past 25 years," says Tom McPhail, head of retirement policy at financial services firm Hargreaves Lansdown.
"The collapse in final salary pensions has not yet been replaced with well-funded alternatives."
While the life expectancy in the UK is rising, so-called 'healthy life expectancy' has failed to keep pace putting pressure upon GP’s and Hospitals.
According to the Pensions at a Glance 2015 report, British pensioners see the biggest fall in income of anywhere in the rich world when they retire.
"This analysis makes embarrassing reading for the politicians who have been responsible for the UK's pensions over the past 25 years," says Tom McPhail, head of retirement policy at financial services firm Hargreaves Lansdown.
"The collapse in final salary pensions has not yet been replaced with well-funded alternatives."
While the life expectancy in the UK is rising, so-called 'healthy life expectancy' has failed to keep pace putting pressure upon GP’s and Hospitals.
Labour leader Jeremy Corbyn recently called for manual labourers to be allowed
to retire earlier than other workers in an article for the Daily Telegraph.
"Some people will be happy to work longer, others not. But living longer doesn't mean we are able to work longer in physically demanding jobs like that of the firefighter, police officer or paramedic," he wrote.
"And it's not just in the emergency services: construction workers, care workers and prison officers cannot be expected to work into their late 60s."
This may not be unaffordable. According to the OECD, concerns about the 'demographic time bomb' of an ageing population may be overstated: while people may not all be able to work until 68, they are working longer than in the past.
On average, says the OECD, the cost of paying pensions will rise from the current level of 9% of GDP to just 10.1% by 2050.
"Some people will be happy to work longer, others not. But living longer doesn't mean we are able to work longer in physically demanding jobs like that of the firefighter, police officer or paramedic," he wrote.
"And it's not just in the emergency services: construction workers, care workers and prison officers cannot be expected to work into their late 60s."
This may not be unaffordable. According to the OECD, concerns about the 'demographic time bomb' of an ageing population may be overstated: while people may not all be able to work until 68, they are working longer than in the past.
On average, says the OECD, the cost of paying pensions will rise from the current level of 9% of GDP to just 10.1% by 2050.
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