AI gains should mean state pension age reduction

Man and robotic machine work together inside industrial building. The mechanical arm performs welds on metal components assisted by a worker who in turn manages welds manually.

Economic gains resulting from advances in digitisation, robotics and artificial intelligence (AI) should be used to reverse planned increases to the state pension age, according to the TUC.

Shaping Our Digital Future, published by the TUC on Monday, examines the potential impact of the technological revolution on jobs and wages.

The report called on the government, businesses and trade unions to work together to mitigate disruption to working people's lives, and maximise opportunities for them to benefit as technology becomes more advanced.

One proposal concerned using income gains from higher productivity to stop planned increases in the state pension age.

In July, the government formally announced plans to increase the state pension age to 68 between 2037 and 2039, in line with proposals laid out in the Cridland report.

"The government is suggesting saving 0.3% of GDP in 2066/2067 by bringing forward increases in the state pension age to 68 for workers now in their 40s," said the report."Estimates of the productivity gain from AI dwarf that figure, with PWC suggesting a 10% boost to GDP by 2030 as a result of AI."

It concluded:"If we do see those benefits arrive, reversing increases in the state pension age and enabling more people to enjoy a decent retirement should be a priority."

According to the report, PWC's estimate of a 10% AI-based boost to GDP by 2030 is the equivalent of an additional £232bn - or extra spending power of up to £2,300 a year per UK household.

It also highlighted, however, the Bank of England estimate that more than a third (35%) of jobs fall into the category of being at"high risk" from automation.

The TUC said administration, clerical and production tasks in the UK are most at risk of being digitised although the report pointed out this did not necessarily mean all those jobs would be lost - rather that many would be replaced with new ones.

Who Benefits?

TUC general secretary Frances O'Grady said:"Robots and AI could let us produce more for less, boosting national prosperity. But we need a debate about who benefits from this wealth, and how workers get a fair share.

"We should look on the changes ahead as an opportunity to improve the lives of working people and their families. The government could use the revenue generated to reverse policies to raise the state pension age. And businesses could use productivity gains to improve the pay and conditions of workers."

Aegon head of pensions, Kate Smith agreed robots and AI software had the potential to bring"huge benefits" to people, arguing the greater use of technology should allow people to remain more"economically active", working in less stressful and physically demanding jobs for longer. In turn, she said, this could give people more flexibility on when they wished to retire.  

Smith also suggested technology had the potential to create greater workforce productivity."Greater productivity is typically associated with higher wages that should be shared across society and enable greater long-term saving by individuals," she explained.

"The combination of higher incomes and the ability to work for longer makes the possibility of a sustainable income later in life more achievable."

 

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