Raise the State Pension Age to 70 by 2028 urges influential think tank

The State Pension Age increases should be accelerated to 70 by 2028 and to 75 by 2035, according to a major new report released today. Getting more 55 to 64-year olds into work could boost UK GDP by £182 billion according to PWC

The UK is witnessing a major demographic shift where an increasingly large portion of the population is over the state pension age and out of work. The report sets out how the UK state pension age is still roughly the same as it was over 100 years ago, when average life expectancy was only 50 years. Half of all UK adults will be over 50 years old by the mid-2030s. Most concerning is that the UK employment rate for 50-65-year olds in low compared to other OECD countries.

The report, Ageing Confidently – Supporting an Ageing Workforce, by the Centre for Social Justice calls for a “reconceptualization of what ageing and old age means”. It claims the UK is not responding to the needs and potential of an ageing workforce.

The current pension age increases are set to 67 by 2028 and to 68 by 2046. However, with improvements to workplace support and healthcare this increase can be accelerated and the full potential of boosting employment rates across the older population can be felt. Faster increases to the SPA will better reflect the longer life expectancies that we now enjoy while also reducing the fiscal cost of an ageing society.

The cost of the UK state pension system in 2018 was 42 per cent of the total welfare spend – £92 billion. This is an increase of £75 billion in a thirty-year period.

Boosting employment rates across the older age population would not only significantly reduce the cost of benefits – the DWP currently spends £7 billion a year on out of work benefits for those above the age of 50 – but would also boost GDP by approximately 9 per cent, £182 billion.

Moreover, it criticises bias in employment practices that have led to over 1 million involuntarily workless older members of the working population and over half of all adults being out of work in the year before the state retirement age. Research increasingly shows that maintaining employment of over 50s is beneficial to long term physical and mental health. There is evidence to suggest that employment, under suitable conditions, reduces the risk of illnesses like dementia.

The report, the fifth and final in the CSJ Future of Work series, calls for an increased emphasis in support for older workers to stay in work.  One of the key recommendations within the report is the creation of an Age Confident employer scheme that will follow the successful model of the Disability Confident Scheme, which was designed to help employers recruit and retain disabled people and people with health conditions for their skills and talent. This new initiative would include certification for businesses that reach certain standards and will offer guidance and support to fight against bias and improve workplace flexibility.

Other recommendations include:

• Enhanced healthcare support through improvements in occupational health, training in mental health first aid and further support for those aged 55 and over from the Work and Health Programme.
• Increased access to flexible working
• Increased access to training opportunities through a proposed Personal Learner Account – a scheme to incentivise adult learning
• Targeted publicization of the Access to Work scheme – a system that can provide grants of as much as £60,000 a year for those with a disability or health condition (physical or mental) that makes it difficult to do parts of their job or commute to work
• Implementation of employee tailored Mid-Life MOTs – a support tool, that includes discussion about opportunities for flexibility, workplace adjustments and training opportunities, for older workers to enable those that want to, to continue work
  Andy Cook, Chief Executive of the CSJ, said:

  “Working longer has the potential to improve health and wellbeing, increase retirement savings and ensure the full functioning of public services for all.”

  “Right now, we are not doing enough to help older people stay in work and the state pension age doesn’t even closely reflect healthy working life expectancy.”

  “All generations deserve to be supported in their choices and the current lack of support for older members of the UK workforce is both socially inexcusable and economically short sighted.”

  “By increasing the State Pension Age, we can help people stay in gainful and life enhancing employment while also making a sound long term financial decision.”