Joia Shillingford: Delayed retirement will benefit us all, not just over-60s

The Organisation for Economic Co-operation and Development says the UK government should encourage workers to delay retirement as this would help boost the economy.

This sounds like an excellent idea as high inflation and low interest rates are making it harder for older people to live comfortably. Moreover, some older people have experience and skills that younger workers do not have and enjoy the companionship of being around others.

There are also state pension benefits to retiring later. For every five weeks you delay claiming your state pension, when you do begin taking the benefit, your payment is 1 per cent higher, or 10.4 per cent higher for every year of deferment. If you delay it for a year, you can take it as a lump sum with interest.

As an example, a pension of £105 a week deferred for five years (ignoring inflation and assuming a higher interest rate) could lead to a lump sum of £32,000.

But there is one major obstacle. Employers. Age discrimination is rife in Britain and a simpler, faster system of penalties is needed to make them keep on competent staff whose only failing is to have another birthday. I hope the Government is working on this now. It has already ditched the Default Retirement Age, so employers can no longer dismiss staff simply because they have reached 65.

One of the most energising sights is arriving in New York and seeing 60 to 80-year olds, who are still movers and shakers, hanging out in the Oak Room and doing deals because they want to and still can.

Another way of boosting the economy is to lower taxes. This is something Barack Obama has proposed in his $447bn (£281bn) job-creation stimulus package. He will cut payroll taxes for employers who hire new workers and also cut tax for workers.

It is hard to understand why the Conservatives – the party of the tax cut – have not done more in this area. It is not just about the absolute levels of tax but also about the psychological levels. VAT at 20 per cent is a problem, not only because it is very high but because it is easy to work out how much it is costing you.

Likewise the 50p tax rate for higher earners, which the Confederation of British Industry is opposed to, is not only high. It also tells the usually hard-working higher earners that they are knocking themselves out to give half their money to the government. Or that they should go and work in a lower-tax country.

So I have some sympathy for Tim Martin, boss of pub chain Wetherspoons. He is complaining that he has to pay 20 per cent VAT on food, whereas supermarkets pay nothing. And that he has to pay a higher tax on beer than they do.

To drive the point home, he has itemised the amount he pays in tax. This tax burden on pubs, he says, is a factor in the many pub closures and loss of pub jobs around the country.

However, the cost of eating in pubs is more transparent than in restaurants. Though no doubt many restaurants are having a hard time, it is partly because it is almost impossible to work out how much you are going to end up spending.

Even when buying a set-price meal, there are usually extras. VAT is often added to the prices in the menu, along with a charge for service of 12.5 to 15 per cent – and then there are the drinks and sometimes a cover charge.

One way of avoiding unpleasant surprises in restaurants is just not to eat out – and this is the policy many cash-strapped consumers are adopting. The first mid-to-upmarket restaurant chain to market itself as having completely transparent pricing – "Our £20 two-course meal with drinks costs £20" – should do very well.

Julian Knight is away

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

election 2015The 10 best quotes of the campaign
A caravan being used as a polling station in Ford near Salisbury, during the 2010 election
election 2015The Independent's guide to get you through polling day
David Blunkett joins the Labour candidate for Redcar Anna Turley on a campaigning visit last month
voicesWhat I learnt from my years in government, by the former Home Secretary David Blunkett
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Ashdown Group: Editor-in-chief - Financial Services - City, London

    £60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

    Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

    £25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

    Guru Careers: Management Accountant

    £27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

    Guru Careers: Project Manager / Business Analyst

    £40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

    Day In a Page

    General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

    'We will not sit down with Nicola Sturgeon'

    In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
    VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

    How ordinary Britons celebrated VE Day

    Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
    They came in with William Caxton's printing press, but typefaces still matter in the digital age

    Typefaces still matter in the digital age

    A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
    Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

    'Missing link' between Earth's two life-forms found

    New microbial species tells us something about our dark past, say scientists
    The Pan Am Experience is a 'flight' back to the 1970s that never takes off - at least, not literally

    Pan Am Experience: A 'flight' back to the 70s

    Tim Walker checks in and checks out a four-hour journey with a difference
    Humans aren't alone in indulging in politics - it's everywhere in the animal world

    Humans aren't alone in indulging in politics

    Voting, mutual back-scratching, coups and charismatic leaders - it's everywhere in the animal world
    Crisp sales are in decline - but this tasty trivia might tempt back the turncoats

    Crisp sales are in decline

    As a nation we're filling up on popcorn and pitta chips and forsaking their potato-based predecessors
    Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

    Ronald McDonald the muse

    A new wave of artists is taking inspiration from the fast food chain
    13 best picnic blankets

    13 best picnic blankets

    Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
    Barcelona 3 Bayern Munich 0 player ratings: Lionel Messi scores twice - but does he score highest in our ratings?

    Barcelona vs Bayern Munich player ratings

    Lionel Messi scores twice - but does he score highest in our ratings?
    Martin Guptill: Explosive New Zealand batsman who sets the range for Kiwis' big guns

    Explosive batsman who sets the range for Kiwis' big guns

    Martin Guptill has smashed early runs for Derbyshire and tells Richard Edwards to expect more from the 'freakish' Brendon McCullum and his buoyant team during their tour of England
    General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

    Miliband's unlikely journey from hapless geek to heart-throb

    He was meant to be Labour's biggest handicap - but has become almost an asset
    General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

    On the margins

    From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
    Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

    'This is the battle of young Egypt for the future of our country'

    Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
    Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

    Why patients must rely less on doctors

    Improving our own health is the 'blockbuster drug of the century'