Do older people offer essential experience? Should they be forced to retire to make way for younger workers?
In this time of economic meltdown, these are valuable questions that need careful consideration.
Raising the retirement age further has not been the focus of the lively debates on future budget cuts.
But last week, the National Institute of Economic and Social Research (NIESR) published a report suggesting that the UK do just that.
The institute’s economists think that debt will rise to nearly 100% of GDP by 2015, not 78% as the Treasury forecast in the budget. It will fall by about 90% by 2023.
Most of us agree that we need to get debt back below Gordon Brown’s former cap of 40% of GDP. But how to do that?
NIESR have proposed 3 solutions. They are fairly extreme measures and I think, if the government adopt them, they will be in a watered down form.
But they are practical solutions to our debt problems:
- We could cut all public spending by 10% over the next decade.
- We could raise taxes by the equivalent of an extra 15p on the basic rate of income tax over the same period.
- We could raise the retirement age by five years by 2023.
I think that, out of these rather sobering options, the last looks the best of the bunch. This will cause income tax receipts to rise whilst spending on pensions will fall.
With our life expectancy increasing, we should value the experience that this valuable workforce have to offer. Elderly people really do have a lot to contribute.
This is in line with the EU drive aimed at ending ageism in employment. When similar ideas were floated a few years ago, the charity Age Concern felt that raising the retirement age was a positive first step in tackling discrimination of the elderly in the workplace.
Perhaps it is time to acknowledge the value of our seniors: quite possibly the best of the bunch!
No doubt of the three option all will have to be used in part as each on its own would cause an outcry. I’d be interested to see the data underpinning of the 70yr retirement figure as many public sector jobs allow retirement at 55 or 60 presently. Unless those are equalised with the private sector – which government has the bottle to take on a major fight with the unions? – the private sector would have to work even longer to balance the figures.
I doubt anyone objects to people being able to work longer if they choose, though I can see many practical problem with a right to work longer in say heavy manual industry. Even in more general business we all recognise that while time gives you experience it also sets you in your ways and no matter how much you attempt (or are compelled as with many jobs today) to complete continuous professional development you inevitably slip behind the curve. Fresh blood that has new ideas is vital and companies could easily be prevented from benefiting if they have older workers they can’t get rid or can only do so with a mountain of bureaucracy.
Lord Taylor: Its odd how a conversation about something can stick in your mind. I was remarking to a stranger some while ago that they were going to up the pension age. His reply “when your knackered, your knackered” is a pragmatism that has never left me.
It makes me wonder about people who propose such things. I have no doubt that they are much younger with none of the handicaps that quietly steal away personal dignity as somebody grows old. They assume all work is desk based and employers are a welfare state in them selves.
Younger people have energy, drive and a mojo. So do older people but in ever decreasing amounts. They deny this of course but it is how others perceive them. To counter the stereotype we often see mutton dressed as lamb that just goes to reinforce the stereotype of old age. Yes, help them with legislation but be realistic.
You must remember it was the Germans who first provided for old age pensions in Europe and pensions across continental Europe do seem on average better than ours. I know they pay higher National Insurance but the money seems to be focused to where it should go.
Your blog is essentially saying that the UK cannot afford to pay its pensioners and that the poor old dears must tread the wheel to avoid abject poverty. The Commons is responsible for this.
If the Commons acts as a tax cartel on taxes by never applying unfunded tax cuts then it acts as a cartel on National Insurance too. As a principle we don’t ring fence taxes but keep the pot for general use. National Insurance revenues go into a ‘fund’ that is essentially a financial plan target for the year. Any surplus goes to general taxation.
The Commons thus has no incentive to lower National Insurance contributions. In fact this is an abuse of the constitution and far greater than the expenses scandal because this income should be ring fenced or protected by law. In this way the levy could be used to lower National Insurance contribution or to pay pensioners a higher income.
Of course the Lords just contents itself with being a reforming chamber, its teeth taken out and placed by the bedside every night. The house CAN stop National Insurance abuse annually as it scrutinises its legislation but it cannot do anything about what amounts to ongoing Commons tax abuse regarding National Insurance.
It is ironic that the nations elderly who could not hold muskets if they tried are party to under funded military campaigns with revenues sneaked away from what is rightfully theirs. If the Commons now feels that it can fight wars whilst the elderly languish in poverty then we should have a Bill of Rights that denies the Commons the power to do this. Has the Commons become a pseudo Monarchy and thinks so well of itself that it is given to ruling us rather than serving us?
A rhetorical question, but does it annoy you when many meeja organisations, including the BBC, abbreviate their headlines to say that ‘Lord Taylor has been suspended from the House of Lords’.
DOH ! Maybe you should try John Major’s line that ‘I’m still here !’
Thank you for all your responses.
Croft and Senex: There is no easy way to resolve our debt problems. National Insurance contributions are ring fenced for a number of social security benefits, including the State Pension.
There is pressure on pensions and we need consider to look at an extension of the working age. People are living longer and healthier. In certain jobs it is not physically possible to work longer, but there are jobs where older workers’ knowledge would be valued.
Young workers are vital for companies, but older people offer essential experience. There should be an option for companies to retain older workers, without affecting their pension entitlement.
You may like to take a look at the Pensions Policy Institute website, which has some interesting material:
http://www.pensionspolicyinstitute.org.uk/
Bedd Gelert: Yes, it is inevitable that the four Lord Taylors in the House of Lords will get confused. I am attached to my family name, but it is sometimes a bit like having four Johns in the classroom.