A World Without Retirement

The comments below are an edited and abridged synopsis of an article by Amelia Hill

In Britain, the raising of the state retirement age will create a new social inequality. Those living in areas where the average life expectancy is lower than the state retirement age will subsidize those better off by dying before they can claim the pension they have contributed to throughout their lives. In other words, wealthier people become beneficiaries of what remains of the welfare state.

A World Without Retirement | BullionBuzz
Newspaper economic headlines in sharp light on dark background

Retirement is likely to be sustained in recognizable form in the short and medium term. Looming on the horizon is a complete dismantling of this safety net.

For those who cannot afford to retire but cannot continue working, the progress Britain has made in tackling poverty among the elderly over the last two decades will be reversed. This group is liable to suffer the sort of widespread poverty not seen in Britain for 30 to 40 years.

Many in their 20s will be unable to save throughout their youth and middle age because of increasing employment, student debt and rising property prices. By the time they are old, members of this new generation of poor pensioners are liable to be, on average, far worse off than the average poor pensioner today.

A series of factors has contributed to this situation: increased life expectancy, woeful pension planning by successive governments, the end of the final-salary pension scheme (in which people got two-thirds of their final salary as a pension) and our own failure to save.

It is easy to see why governments might regard raising the state retirement age as a way to cover the cost of an aging population, but there are problems with this approach. Those who can work into their 70s and beyond are the privileged few.

Please share...

Leave a Reply

Your email address will not be published. Required fields are marked *