The news that people born after 1990 will have to work until they are 70 before they can claim their state pension is more likely to be met with an exhausted sigh than a whoop of delight – particularly by those in their twenties, who will be the first to be affected by the change.
The logic is as impeccable as the reforms are unavoidable, however. As life expectancy has increased, so has the length of time an average individual spends in retirement – and with it the burden on the public purse. In 1952, one might have expected to spend around a fifth of one’s life as a pensioner; now, the proportion is nearer to a third, and rising. The already-struggling Treasury simply cannot cope. Hence the Chancellor’s plan – to be included in this morning’s Autumn Statement – for a formula to keep the retirement age in line with lifespans.
On the plus side, we will be given at least a decade’s notice each time the pension age is to be raised. But the hike to 68 currently scheduled for 2046 could come forward by 10 years, with another rise, to 69, the following decade.
Cue another round of lamentations about working until we drop, and another burst of resentment from a younger generation that already feels it is paying the price for the indulgences of – wealthier – predecessors. Yet the economic arguments are overwhelming. Some £100bn has been wiped off the state’s future liabilities by existing plans to delay retirement to 67 by 2028; the new plan will take out another £400bn. Given the sorry state of the public finances, such sums are not to be sniffed at.
But there is another – even more compelling – reason to embrace the changes. Our better food, better medicine and more comfortable living conditions are a triumph of human progress. Retirement at 70, or even later, is hardly working into one’s dotage for someone who may comfortably go on into their nineties and beyond. Indeed, a third of life lived in retirement is positively luxurious. That we now live so long is a blessing and a wonder. The need to work slightly longer before claiming a state pension is hardly a heavy price to pay. We should not be bemoaning George Osborne’s reforms; we should be throwing a party.