Monday 16 December 2013
Reduces With Time
Alex Andreou writes:
We live longer, so we have to work longer. It's a pretty rational, self-evident statement which has become the mantra for those seeking to justify raising the retirement age in the UK. However, when a policy is based on national averages, it can obfuscate some startling inequalities.
Back in the 1930s, the average life expectancy for a professional man was about 61. A retirement age of 60 was seen effectively as a short sabbatical from work, during which a patriarch could get his affairs in order before dropping dead.
More recently, the dream has been of retirement as an extended period of mellow rest, a long holiday reward for those who have spent a lifetime working, with the mortgage paid off, no alarm clocks and long commutes, without the pressure of raising children. The dream turned out to be just that.
Only the Mexican state, among the developed world, is meaner to its pensioners than the UK, according to the OECD. Along with free higher education, social security for the most vulnerable and, increasingly, healthcare, many are coming round to the fact that, apparently, we can no longer afford to retire when we do. The chancellor confirmed this in his autumn statement, putting forward plans to bring the pension age up to 70 in the next few decades.
The trouble is that when policy is based on the statistics of a nation riddled with increasing inequality, policy becomes skewed and unfair. In 2011, male life expectancy in Dorset was almost 10 years higher than in Blackpool. In its latest statistical bulletin, the Office of National Statistics accepts that the distribution of life expectancy across England is "characterised by a north-south divide".
It is the same situation between affluent and deprived areas, and this gap is growing rather than closing. The difference in life expectancy between rich and poor is wider now than in the 1970s. More of the poorest in society are dying before the age of 75 from heart disease and cancer. Similar discrepancies can be observed if you group mortality rates by profession – unskilled manual labourers die young and skilled professionals live the longest.
Seen in this more individual way, the rationale becomes much more problematic. Why should a poor Blackpool builder keep carrying bricks up scaffolds at the age of 69, the proceeds of which labour, long after he has died, will keep a southern office worker in clover?
It becomes clear that this is yet another way for the better off – and I include employers who plainly do not pay enough into pension pots, otherwise there would be no problem – to extract money from the worse off.
There are even proposals to link pension age automatically average life expectancy. However, as Prof Sir Michael Marmot, points out (paywalled link), average figures mask a variation of up to 16 years, between the most and least advantaged. He also suggests that a long life does not automatically mean a disability-free one, especially for those in the poorest areas.
Jeremy Hunt has resisted the idea that there should be a distinction between types of work, but isn't this refusing to accept one of the most indisputable facts of life: that our capacity for physical work diminishes with time?
The debate over the age of retirement can, ultimately, only make sense viewed through this sort of complex human prism and only in its proper economic context. We have nowhere near full employment – we very rarely have had over the past 50 years. Almost 1 million young people are unemployed. Millions more work part-time or on zero-hours contracts.
The extra contribution by folks in their 60s forced to work an indeterminate extra number of years, far from going to pay for their retirement, actually goes to pay for someone else's forced unemployment. In this context, working until the age of 70 denies a living to someone trying to start out.
Simply lengthening the working age bracket is a potential disaster, unless the inequalities at the heart of the policy are addressed in a detailed and sensible way and we achieve full employment. The state must ensure the economic conditions which will guarantee a proper living for those who want to work, before forcing work on people who no longer wish it.
Otherwise we risk the resentment of the old, the frustration of the young and the anger of the poorest. Otherwise, we are marching towards a future where 69-year-olds are assessed for arthritis by Atos and told to go stack shelves in a supermarket for their jobseeker's allowance.
Never mind a year after retirement. Luxury! Many working-class men will drop dead at work.
In Germany, they have just reduced the pension age. But they are not paying for Trident in Germany.