Flexible retirement age: an idea whose time has come?

Older black man forming pottery on wheel in studio

Part 4 of a 9 part series

What caused one of the worst military disasters ever faced by the Roman empire? Retirement, says Mary Beard, professor of classics at Newnham College, Cambridge. In AD14, the imperial power increased the retirement age and decreased the pensions of its legionnaires, causing mutiny in Pannonia and Germany. “Things got pretty bloody,” Beard tells me. “The ringleaders were rounded up and disposed of but not before the soldiers had offered the throne to one of the imperial princes and he’d had to make a show of saying he would kill himself rather than be disloyal.”

Retirement, then, is an ancient concept. But the threat of mutiny when it appears threatened apparently remains alive. “Retirement has been stolen. You can pay in as much as you like. They will never pay back. Time for a Grey Revolution,” wrote one commenter below part three of this series.

But are we really being cheated of the retirement we deserve – or have our expectations become unrealistic? In this fourth part of my exploration of the changing nature of retirement, I’m considering what history can tell us about what it might look like in the future.

Firstly, we should recognise that retirement has only recently been presumed to be a financially secure stage of life. Pensioner poverty began to improve only in the late 70s as the value of the state pension rose and an increasing number (mainly men) were able to benefit from occupational pension schemes, explains Chris Phillipson, professor of gerontology at the University of Manchester and co-director of the Manchester Institute for Collaborative Research on Ageing.

While the first contributory, flat-rate pension in the UK was introduced for women who reached 60 and men who reached 65 by the 1946 National Insurance Act, for most of the 1950s and 1960s, those without an occupational pension – the majority of working-class pensioners – were condemned to eke out their old age on the margins of poverty. “The reality is that the 1950s and 1960s were a time of great poverty for the majority of older people,” says Phillipson.

It wasn’t until the 70s and 80s, when there was a dramatic fall in employment rates among older men (and to a lesser extent older women) – in 1970, the employment rate for men aged 60-64 was 81%; by 1985 it had fallen to 49.7% – that the idea of a “third age” between the end of work and the start of old age began to emerge.

At the same time, the old trajectory of education–work–retirement began to crumble, never to recover. By the 90s, it was clear that the “jobs for life” culture had been replaced by part-time and flexible working, and the idea that people might have second – and third – careers.

It was in these decades, argues John Macnicol, a visiting professor at the London School of Economics and author of Neoliberalising Old Age, that a “socially elegant mythology of the prosperous pensioner was constructed in the face of empirical evidence that showed exactly the opposite to be the case”. This, he believes, is when the idea of pensioners moved from being poor, frail, dependent and deserving – to prosperous, hedonistic, politically powerful and selfish.

Since the 1970s – and particularly since the early 1990s – old age has been redefined almost out of existence in the name of agelessness, Macnicol says. “In the final analysis, the right to retirement is being undermined: more coercive, stricter labour market activation is presented as providing new ‘opportunities’, removing ‘barriers’ to working, bestowing greater ‘inclusion’ and even achieving upward social mobility,” he said.

As we have seen throughout this series, some people approaching retirement consider this flexibility and opportunity to keep working essential. Others can’t wait to stop, new “opportunities” or not. One reader, Christopher, who is 68 and still working, emailed me to say: “Please take care in this series to recognise the element of free choice … For many, we should recognise the pension as a hard-earned and self-paid relief from physical labour. We should not see a longer working life as an expected way of life.”

We are not quite there yet – but such an approach is already coming into view. According to Phillipson: “For the present, retirement is likely to be sustained by the attitudes and demands of ‘first wave’ boomers, many of whom have shaped expectations, over their life course, of a ‘normal’ retirement. But longer term, the situation is less clear.”

Already we have what Alan Walker, professor of social policy and social gerontology and the director of the New Dynamics of Ageing Programme at the University of Sheffield, calls a “desperately low basic state pension”, and for the 3 million older people with no second pension or sufficient savings, retirement means poverty.

And a rising state pension age could mean that in future, some don’t ever receive it. “Many groups of workers will not benefit from a period of retirement because they will die before the state retirement age or will have insufficient income to be able to leave what may be precarious work in their 60s and early 70s,” says Phillipson.

“Without question in the future (unless reforms are made) the rising pension age combined with inadequate personal pensions/savings will severely restrict the length of time which some groups are able to spend in retirement. This is becoming a major source of inequality.”

The point I think is most key here is that, as Phillipson explains: “In future, therefore, there will be a substantial redistribution from the poor to the wealthy, raising the issue of who will soon be benefiting from the remains of the social state.”

Perhaps we should go back to the history books. It was in 1881 that the German chancellor, Otto von Bismarck – despite his impeccable rightwing credentials – made a radical speech to the Reichstag, calling for government-run financial support for those aged over 70 who were “disabled from work by age and invalidity”.

The scheme wasn’t the socialist ideal it is sometimes assumed to be: it was actually a disability pension, not a retirement pension as we understand it today, and a retirement age of 70 just about aligned with life expectancy in Germany at that time. Bismarck, however, had a further a vision that was genuinely too radical for his era – and remains too radical for this one, although many readers who have got in contact with me directly and in the comments say they would welcome it: a pension that can be drawn at any age at which the contributor is judged unfit for work.

Like Bismarck, the economist William Beveridge recommended a flexible retirement age, whereby higher pensions were paid to those who felt able to defer retirement. It’s an idea that is being discussed in various forms: the New Economics Foundation (NEF) is arguing for a shorter working week via a “slow retirement”, with those in work giving up an hour of work from their weekly routine every year from the age of 35, to allow a steady handover of retained wisdom.

A shorter working week, of course, means lower salaries but the NEF’s Aidan Harper argues that we could all live on less: “Many of us are consuming well beyond our economic means and well beyond the limits of the natural environment, yet in ways that fail to improve our wellbeing,” he says.

Judging from responses to this series, the idea that we might be able to determine our own retirement age is one many people would passionately support. A more flexible approach to when people should retire would make more allowances for good and poor health, wrote one commenter. “For those who are destined to fail to make it to the current retirement age, and those who make it into their 80s with their heads clear and their bodies in good shape, and all of those with differing needs between the extremes. Nature’s gifts and flaws aren’t distributed evenly. We need to find fair ways to compensate.”

This article was written by Amelia Hill from The Guardian and was legally licensed through the NewsCred publisher network.

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