Balancing act - with population

Oct 8 2009 by Peter Jackson, The Journal

WORK until you drop - or at least until you are 66 -  is the new proposal from the Conservative Party.

In order to help close the gaping hole in the public finances, Shadow Chancellor George Osborne plans to raise the state pension age for men to 66 from 2016, up to 10 years earlier than planned.

I suspect that most people will see the reasonableness of this, which does not mean, by the way, that they will vote for it. The hapless Neil Kinnock discovered in 1992 that people may approve, in theory, of strong medicine, but only so long as it's somebody else who has to swallow it.

In a recent Government document 'Building a society for all ages', Gordon Brown himself points out in the foreword that, already, for the first time in history, there are more pensioners than there are children under the age of 16.

The only way we can expect those of working age to support those of retirement age is by increasing the numbers of the former in relation to the latter. The only way that is going to happen - short of an explosion in the birth rate, even greater immigration than we have seen hitherto or a plague which carries off most of those over 60 - is by extending the working age.

With medical advances and the huge increases in life expectancy we have seen over recent years, we can do this and still expect a longer - and healthier - retirement than our forbears.

But if a government is going to push back the age at which we can expect to draw a state pension, then it must also do something about the mandatory retirement age.

As the law stands, anyone who wishes to appeal an employer's decision to retire them at the age of 65 has no recourse to law; if the employer wants to do it, they can do it.

This makes no sense. The mandatory retirement age could be abolished but we could still leave employers the right to dismiss for incapacity.

We should go further in tackling the public account deficit and give people the right to work as long as they choose but postpone any state pension entitlement until they make the choice to retire.

Peter Jackson is a writer and former business editor of The Journal – p.jackson77@btinternet.com