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The Institute of Directors is calling on the U.K. government to raise the default retirement age from 65 to 68, arguing that more people want to work past 65 because they are living longer, healthier lives. But while many will be capable of doing their jobs past 65 and into their 70s, the government must recognise this will not be possible for all employees in all job types, the IOD said in response to the Department for Work and Pensions consultation into the future of the default retirement age.
In Spain and debt-ridden Greece, the motives are different, as their state pension funds are bankrupt, just as in Cyprus, and extended contributions are necessary if today’s workers are ever to get a pension when they retire.
Here, we see employees from the public sector or semi-government organisations (EAC, Cyta, etc.) retiring at the prime age of 60 with their generous benefits in hand and still having a good ten more years to contribute to other work in similar fields or elsewhere in the labour market.
However, Britain’s IOD cautioned that in some instances it simply will not be possible for employers to adapt jobs to suit older workers. And in small firms it may be completely impossible to redeploy older workers to suitable jobs.
In a separate report, the U.K.’s Equality and Human Rights Commission (EHRC) said that people should be allowed to work beyond 65 and with more flexible hours, calling for “much more imaginative approaches to retirement” and saying that an extension to the default retirement age would lead to a “big boos” to the economy.
The EHRC argues that retirement should be “about capability and not about age” and even recommended that the default retirement age should be abolished to prevent an anticipated skills shortage, while addressing the challenges of an ageing workforce.
Research from the National Institute of Economic and Social Research, showed extending working lives by 18 months would inject GBP 15 bln into the British economy, as another survey found that 24% of men and 64% of women plan to keep working beyond the state pension age. While the research indicated that employers are offering lower level, part-time work to those aged over 50, twice as many older workers are seeking promotion rather than wishing to downshift.
Radical change is what needs to happen for older people to stay in the workforce, while at the same time benefiting the economy more broadly by decreasing welfare costs and increasing the spending power of older workers.
Perhaps it is about time the Christofias administration strayed away from its rejectionist stance on this matter and considered the alternatives, before we lose our pensions to today’s perk-laden civil servants.
