Ros Altmann: Why Ministers must rethink retirement

Former pensions minister Ros Altmann.
Former pensions minister Ros Altmann.
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OVER the past two years, the importance of encouraging and enabling older people to keep working if they wish to, has increased significantly.

I am delighted to see, at long last, the Government’s response to my March 2015 report as Business Champion of Older Workers.

Brexit makes longer working life even more vital: Reduced immigration associated with Brext means we must make more use of British workers and increase support for later life working.

With dramatic increases in life expectancy in recent years, plus the huge bulge of baby boomers reaching their 60s now, the opportunity to rethink retirement is urgent. Helping more over 60s work part-time and facilitating flexible work, will enhance productivity and growth.

Older workers valuable skills: Employing more older workers in an ageing population will ensure the skills and experience of older British citizens are tapped into more effectively, while also better meeting the needs of an aging customer base in many industries.

Older women face particular disadvantages: The Government also needs to recognise the particular position of older women. The current cohort of women in their 50s and 60s has been particularly disadvantaged throughout their lives in terms of both earnings and pensions.

These women were not included properly in the state pension system so they have lower state pensions than men – and their state pension age has been increased significantly without adequate warning. They were often excluded from workplace pensions, so they have lower private pensions too.

When they had children they often lost out in terms of earnings and pensions. In addition, many of these women are caring for older relatives and need more flexible work opportunities to enable them to keep earning. More flexibility, more support for women and closer monitoring of unconscious bias as well as outright age discrimination is needed to help overcome such disadvantage.

Big tax burdens on young if older workers retire too soon: Failure to facilitate fuller working lives will place a much bigger tax burden on younger generations and consign more older people to poverty. The best determinant of better off older people is whether or not they are still working. The aim of getting one million more over 50s to stay in work is important and the sooner we achieve it, the better for all of us.

Employers recognising benefits of older workers: The Government is building on the three ‘Rs’ concept introduced in my 2015 Report. Employers are increasingly recognising the benefits of ‘Retaining, Retraining and Recruiting’ older people in their workforce. The Business Taskforce that I established has continued its work and is now trialling initiatives that can help extend working life for those who want it, as well as helping older workers combine working with caring responsibilities, as will increasingly be required.

This is nothing less than a social revolution – and it’s already underway. More older people are working now than ever before, yet there is still much further to go. Even though life expectancy has risen by more than 10 years in the past couple of generations, average retirement ages have fallen. What a waste of resources.

Working longer can boost pensions too: If more people keep working, perhaps increasingly on a part-time basis, they will still be earning money and many will be able to save more in their pensions as well as drawing on their private savings later, so they will last longer.

More initiatives needed: There is still much to do. Whether it is more older worker specialists in JobCentres, or greater support for self employment, or mature apprenticeships and mid-life career reviews, we must do more to ensure older workers are engaged in the world of work for as long as they want or need to.

The Government needs to recognise the importance of this agenda. Changing social norms is never easy, but it is vital to the future success of our nation.

Ros Altmann is a Tory peer and former pensions minister.