Raising the state retirement age to 71 would condemn millions of middle-aged people to misery as they get older, Britain’s biggest independent organisation of older people and a former pensions minister have said.
The National Pensioners Convention (NPC), which represents more than 1.15 million members, said the proposals “in no way reflects the harsh reality of getting older in the UK”.
The general secretary, Jan Shortt, said: “These proposals will affect everyone currently in their early-50s and younger, and will considerably add to the one in four pensioners already living in poverty. They will condemn even more people to a miserable retirement, as well as increasing pressure on already struggling public services.”
Shortt said the proposals favoured only higher-income groups because although the number of people living longer had been increasing, the number of those living with ill-health – and therefore not able to work longer – was also rising.
“Making those already living with ill-health wait even longer to claim their pension will only increase poverty and the demand on already-creaking services, such as health and care,” she said.
Ros Altmann, the former pensions minister, agreed. “Raising the state pension age to 71 should be unconscionable,” she said. “Only the top 10% of the UK population stay healthy into their early 70s, so cutting costs by making unwell workers wait longer, favours the well-pensioned, higher paid.
“Chronological age is too inflexible as a unique criterion of eligibility for a state pension, which is part of every worker’s social contract. In addition, neither the NHS nor the UK labour market are prepared for this policy – the former because of the big health differentials across the country and the second, because it is rife with ageism.”
Two reports published since the International Longevity Centre proposal on increasing retirement age was announced last week showed how the current state pension was providing well below the minimum income needed to cover a person’s basic needs.
The state pension will increase by 8.5% in April to just over £11,500 a year. However, owing to the rising cost of food and energy, plus an expectation to offer financial support to grandchildren, a report on Wednesday found a single person needed an annual income of £31,300 a year for a moderate income in retirement – an increase of £8,000. Couples would need £43,100.
A separate report suggested women typically needed to work for an extra 19 years to retire with the same pension savings as men. The Pensions Policy Institute report found that women retired on average with pension savings of £69,000, compared with £205,000 for men.
Shortt said the picture was even bleaker, adding that it was wrong to assume every pensioner would receive the new £11,500 annual pension. Most retirees, especially women, were on a lower rate and – even if they qualified for entitlements such as housing benefit or had small occupational pensions – would struggle to survive on an income that could not keep pace with rising costs.
“In the light of these new reports, the government policymakers must dismiss new proposals to raise the retirement age to 71 as a fix-all for the UK’s ageing population,” she said.
The NPC is calling for the next scheduled retirement age increases to be shelved, with its “68 is too late” campaign in collaboration with Unite and the Scottish Pensioners’ Forum.
They want government policymakers to develop a new plan with public, private- and third-sector groups to ensure no one falls into poverty as they age.
There are almost 11 million people aged 65 and over, comprising 19%, or nearly one in five, of the population. In 10 years this will have increased to almost 13 million, 22% of the population.
But Jonathan Cribb, an associate director and head of retirement at the Institute for Fiscal Studies pointed out that an underlying problem centred on the NHS and social care: while state pensions and pension benefits were estimated to increase by £45bn by 2050, he said, the pressure on public finance from health and social care was estimated to rise by £105bn in today’s terms over the same period.
Shortt added that it was “not enough to say the country can’t afford the pensions bill for an ageing population. The nation won’t be able to afford an epidemic of elder poverty and illness in the next decade if they do nothing.”
