Despite fears of an increasingly high retirement age, we are actually retiring slightly earlier than 70 years ago. Data from the Department for Work and Pensions (DWP) shows that men retired around the age of 67 in 1950. This compares with the average age of 65 today. Both in 1950 and today, women retire around the age of 63. However, the research does indicate that those retiring today are younger by a few months.
The effect of pension age
Regardless of today’s figures, the stark truth is that undoubtedly, the retirement age will rise over the coming years. This will become particularly apparent as the age for claiming the state pension gradually increases too. In fact, because relatively few people have adequate private pension schemes to support them until the state pension becomes available, they will quite simply need to work for longer. The need to supplement their income has already seen an increasing number of people choosing to work beyond retirement age, or at least on a part time basis.
Employment experts predict that by 2039, both men and women should expect to reach at least 68 years old by the time they can retire. While for many people it will mean they’ll have to wait a little longer to enjoy their retirement plans, for others it means working longer with poor mental and physical health. While many employers are happy to allow their staff to continue well beyond retirement age, or even employ new staff older than 65, for some physically demanding jobs, this may not always be practical. This is an issue the government will certainly need to address.
Variable state pension plans
The publication of the DWP figures comes just as Labour states its determination to make a variable state pension age (SPA) a reality. The Labour Party has been looking across the world at variable SPA models to find a way to make it work here. The Labour Party claims that not everyone should get the same pension and at the same age. They say that for someone who began work at 16, paying their taxes from 18, while working in a hard labour job, to receive the same benefits as someone who began working and paying taxes later is unfair; particularly because a hard labour type role could leave them with certain health issues. Labour want to look at just how to determine which categories should be allowed to retire early and how this should be judged.