Expectations of a 20 year retirement period are no longer ‘economically or socially sustainable’ according to a recent think-piece from the International Longevity Centre UK.
The report argued that older people should be obliged to contribute to the economy for longer and utilise their property wealth to fund care costs. The ILC-UK stated that retirement should no longer be seen as ‘an event’ but ‘a process’. They made suggestions of a number of aspects of the current retirement system which need to be reconsidered to help stabilise the economy.
The report expressed beliefs that ‘where possible’ older citizens should continue their working lives for longer. Since 1881, the economic activity levels of men aged 65 and above in the UK has dropped from 74pc to just 10pc.
While the average retirement age is currently around 63 in the UK, according to the Eurostat survey it is predicted that the likely retirement age for those aged 15-24 is 57. The report argued that:
“Older citizens have a responsibility to remain in the labour market, where possible, to enable skills retention and minimise fiscal burdens on taxpayers.”
The report called for the Government to develop plans to combat the ‘cliff edge’ which separates working lives and retirement for many people. The ILC-UK proposed the introduction of gradual retirement in order to help counteract the retirement problems in society. The notion of gradual retirement promotes longer working lives by offering older people ‘more age-appropriate employments’ and allowing them to move towards ‘more flexible’ employments.
‘Downshifting’ in the workplace would be a key aspect of the gradual retirement process. This would allow older people to undertake a position which demands less responsibility and/or fewer hours. This could also take the form of a part-time role with their current employers or a position in a different establishment which is better suited to their later stage of life. The ILC-UK explicated that this could help provide older people with a ‘smooth transition’ from working lives to retirement:
“Gradual retirement will not emerge organically. It requires commitments from employers to support their older workers, and reorient career structures so that the experience of older workers is most effectively utilised...The state pension could offer “graduated state pension‟ options so that people could combine income from their state pension and employment.”
Contributions and citizenship
A final conclusion from the ILC-UK was that measures should be implemented to ensure that conflicting messages about citizenship are not sent out. The think-piece suggested:
“An ageing society problematises these social rights, because a smaller proportion of in-work taxpayers are available to fund the claims on citizenship entitlements of those not in work.”
“Citizenship matters: establishing the rights and responsibilities is important in-itself, but also as a way of ensuring social solidarity. In an ageing society, we must pay attention to the kind of citizenship entitlements and obligations we are creating, often inadvertently, if we are to avoid intergenerational conflict.”
They suggested that in order to counteract citizenship issues in the ageing society, procedures should be introduced to help older people stay in their own homes while they contribute longer to the labour market even in the form of volunteering.
As Britons are living longer and healthier lives, many people believe that retirement procedures need to be revised in alignment with this.
Dr Ros Altmann, Director General of Saga said:
“Retirement needs to catch up with people's lives. There is a whole new phase of life opening up - the bonus years - where people work part time, as and when and how they wish to. This would be a win-win for the economy and society - it will help older people have higher incomes and create more jobs for the young. If we carry on as we are, then people will stop working, have low pension incomes and reduced spending power, which will stifle growth.
“A social revolution where we redefine age and rethink retirement is well underway - by embracing and in fact welcoming the opportunities of these bonus years, we can help boost our ailing economy, ensure less reliance on the state and ultimately make retirement more fulfilling.”
Chief Executive Officer of ILC-UK, Baroness Sally Greenough concluded:
“Our message for older people should be the same as the one we are giving to younger people. ‘Our economy and society need you.’”