Increase In State Pension Age Research Articles

On the Postponement of Increases in State Pension Age through Health Improvement and Active Ageing

The UK population is predicted to grow from 65 m in 2015 to 71 m in 2030 and 75 m in 2040, with the number aged 65-plus rising to 18 m. Successive governments have been reluctant to increase taxes but this looks increasingly unsustainable, if the increasing demand for health and social care is to be met. Increasing state pension age is the customary response for keeping pension contributions and benefits in balance in Pay As You Go (PAYG systems). However, this policy raises concerns about the capability of people to work to ever higher pension ages. Using newly available labour market data on health and disability, the paper finds limits to how far pension age can be increased without necessary health improvements. If improvements were forthcoming, planned pension age rises could be postponed. However, inequalities in healthy life expectancy across the UK are a major barrier to its achievement.

Stung by Pension Reforms: The Impact of a Change in State Pension Age on Mental Health and Life Satisfaction of Affected Women

Several reforms increased the state pension age (SPA) in the UK and equalised it to age 65 for both men and women. We use panel data and a difference-in-difference approach to comprehensively analyse the direct and indirect effects of these reforms, investigating mechanisms for indirect effects. We also analyse the heterogeneity of the effects of smaller versus larger increases in SPA, by partnership status, as well as spill-over effects to male partners. Consistent with previous research, we find a positive impact of the reform on employment and labour force participation, but also large negative impacts on various aspects of personal, financial, and mental wellbeing. The effect is larger for women who have to wait longer to reach their SPA, and smaller for women with a partner (compared to those without a partner). The effect of the reform partially spills over to affected women partner's labour market participation. Our results can be generalised to other countries that are seeking to implement similar reforms.

Extending working life and the management of change. Is the workplace ready for the ageing worker?

AbstractIncreasing longevity and the strain on state and occupational pensions have brought into question long-held assumptions about the age of retirement, and raised the prospect of a workplace populated by ageing workers. In the United Kingdom the default retirement age has gone, incremental increases in state pension age are being implemented and ageism has been added to workplace anti-discrimination laws. These changes are yet to bring about the anticipated transformation in workplace demographics, but it is coming, making it timely to ask if the workplace is ready for the ageing worker and how the extension of working life will be managed. We report findings from qualitative case studies of five large organisations located in the United Kingdom. Interviews and focus groups were conducted with employees, line managers, occupational health staff and human resources managers. Our findings reveal a high degree of uncertainty and ambivalence among workers and managers regarding the desirability and feasibility of extending working life; wide variations in how older workers are managed within workplaces; a gap between policies and practices; and evidence that while casualisation might be experienced negatively by younger workers, it may be viewed positively by financially secure older workers seeking flexibility. We conclude with a discussion of the challenges facing employers and policy makers in making the modern workplace fit for the ageing worker.

Brexit adds to gloom over long‐term growth prospects

The prospect of continued weak productivity growth and less support from rising labour supply means we are relatively gloomy about medium‐term growth prospects. Our forecasts show potential output growth of just 1.6% a year from 2017–2030. This would be well below the average of the decade prior to the financial crisis (2.7%) and in line with our estimate for the 2007 and 2016 period which included the global financial crisis. We have become more pessimistic about the extent to which growth in total factor productivity is likely to accelerate. This is partly due to a judgement call that more of the weakness since the financial crisis reflects structural factors. Brexit is also likely to weigh on long‐term prospects, resulting in a degree of trade destruction and lower FDI inflows than would be the case were the UK to remain in the EU. Brexit is also likely to result in less capital deepening. Demographic factors also point to weak potential output growth moving forwards. High levels of inward migration have mitigated the impact of an ageing population recently. However, immigration is likely to fall sharply over the next decade, as first an improving European labour market reduces incentives to migrate and then the UK Government adopts more restrictive immigration policy. We are also coming into a period where there will be fewer increases in state pension age than of late. Since the mid‐1990s there has been a surge in the number of people going to university, resulting in strong contributions from human capital. But this will be less important moving forwards as university admissions reach a ceiling. Stronger growth in potential output would be possible if Brexit results in trading arrangements which are closer to the status quo, or if policy is more ‘liberal’, than our baseline assumptions.

Increasing pension age — Inevitable or unfeasible? Analysing the ideas underlying experts' arguments in the UK and Germany

Based on interviews with German and British experts from major political parties, government departments, employer confederations, trade unions and special interest organisations, we investigate the chains of arguments that these experts advance in favour of or against increases in state pension age. In this way, we add to the explanation why very similar reforms could be enforced in the very different pension systems of Germany and the UK. The chains of arguments deployed are surprisingly similar between the two countries: Whereas the proponents of reform stress its necessity in the context of pension spending and see older people as being able to work longer, opponents and sceptics of the increase doubt most older people's ability to work longer and thus the feasibility of the reform. The proponents prioritise ideas of intergenerational justice and meritocratic justice based on individual performance, and underline pension-related interest oppositions between age groups and cohorts. By contrast, opponents and sceptics tend to focus on needs-based justice and social inequalities within age groups. Concomitantly, the actors have different ideas on how a flexible transition to retirement could be organised, with country differences being more pronounced here.

A New Pension Settlement for the Twenty-First Century? The UK Pensions Commission's Analysis and Proposals

This article summarizes the analysis and recommendations of the UK Pensions Commission, which reported in November 2005. The UK faces similar demographic challenges to other nations from increasing longevity and past fertility declines. However, in the face of them, both state and private pension provision are in decline for younger cohorts. The Commission proposes reforms to the state pension system which would make it more generous, less means-tested, and more universal than it would otherwise become. This would require both higher public spending on pensions as a share of GDP than now, and a gradual increase in state pension age after 2020. It also proposes establishment of a new National Pension Savings Scheme, into which workers would be automatically enrolled (with the right to opt out) if they were outside good employer provision, together with measures to facilitate later and more flexible retirement. Copyright 2006, Oxford University Press.