The People Bulletin

France has the lowest state retirement age in Europe with one of the higher life expectancies, yet the entire country ground to a halt on 24 June as some two million public sector workers downed tools in protest at plans to raise the state retirement age from 60 to 62. It was cut from 65 to 60 back in 1983, with les hommes actually retiring at an average age of 58.7 years compared with 63.5 in the rest of the OECD. According to the national pensions advisory council, France is staring at a funding shortfall of up to £95bn by 2050 if something isn’t done. 

Back in the UK, our own £55bn a-year state pension bill has come under the scrutiny of the new government. The Department for Work and Pensions launched a consultation on 24 June to speed up when the retirement age should go up to 66.  However, it is widely assumed this will be effective from 2016 for men and 2020 for women. As Steve Webb, the pensions minister explains: ‘with life expectancy in retirement continuing to increase, leaving state pension age unchanged is simply not an option. It will mean, therefore, that people have to wait longer to receive their state pension to ensure it will be at a decent level when they do so.’ 

The plans include a possible scrapping of the default retirement age (DRA) of 65 and the right to request working beyond it – something that the CBI believes would be problematical for employers. ‘Both companies and staff benefit from having a clear framework for the timing of retirement’ said its deputy director-general, John Cridland. The TUC, while welcoming the decision to end an arbitrary retirement age, makes the point that the short timescale has been driven by a ‘desire to cut spending rather than a planned approach to introducing more flexible retirement.’  TUC general secretary, Brendan Barber also made the point that one size does not fit all. ‘ Raising the state pension age will hit the less well-off far more than the rich. 65 year-old men in Kensington and Chelsea can expect to live a further 23 years, while those in Glasgow only 14 years.’ 

Barber also raised the issue of discrimination. He said: ‘A majority of 64 year-old men are already out of the labour market.  Raising the state pension age will not help any of them stay in work.  It will simply turn a generation of 65 year-olds from pensions into the unemployed. The government must also spell out what will happen to women as only increasing the pension age for me is almost certainly a breach of sex discrimination law.’

Ian Bird of benefits consultants Foster Denovo told The People Bulletin that removal of the DRA could open the floodgates to hundreds of age discrimination claims: ‘Employers will be in a risky position if the default retirement age is abolished. They will lose flexibility over when workers retire and without a default retirement age, the onus will be on them to prove if an employee is not longer fit for work if they want them to retire,’ he said.

The DWP consultation ‘call for evidence’ can be accessed from the DWP site here and the deadline for responses is 6 August 2010 with responses scheduled for autumn publication.

The medical case for retiring older workers became more confused in the light of research from New York’s Mount Sinai School of Medicine which found that long-term memory remains unaffected by age and a person’s vocabulary, social skills and emotional intelligence may all get better.  However, short-term memory, learning skills and the ability to reason do decline with age, but not all mental faculties reach their peak when a person is in their 20s, as has been believed.