Connected Research

Union policy research in the 21st century

Tories to bring forward increase in retirement age

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Tory party plans to bring forward the increase in the state retirement age are being leaked out from their conference.

Shadow Chancellor George Osborne will tell the conference later today that he expects to bring forward the rise in the retirement age for men to 66 starting from 2016 rather than 2024, which was the suggestion of the Turner (Pensions) Commission and accepted by the government. The privately-stated stated purpose of bringing forward the retirement age is the state of the country’s finances – Osborne will use the £13bn saved to reduce the national deficit.

So:

1. the country’s workers are to be made to pay for the mistakes of banking executives – while banking culture (including, but not limited to, executive remuneration) remains untackled. Of course, a sidelining of the money saved into plans to cut taxes for the rich is not inconceivable, not least since Osborne is refusing to abandon his plans for cutting inheritance tax.

2. According to The Scotsman, Osborne will suggest publicly in his speech that the rise in the retirement age will be necessary to help restore the link between pensions and rises in average earnings (a link cut, we should remember, by the Tories in 1981). Inevitably, this will therefore leave pensioners no better off (and some – those who die early in retirement, for example – will be worse off), when restoring the link with average earnings is intended to improve their position (or, better said, to ensure it does not continue to become relatively worse).

3. The state retirement age for women is being increased to 65 between 2010 and 2020 – four years after the male retirement age will start to rise, according to these plans. Osborne needs to say precisely what will happen to the retirement age for women under this scenario. Or Cameron. Or someone. [Edit: He did say: the retirement age for women would rise to 66 starting from 2020 – essentially, a continuation of the gradual increase women are already faced with starting from next year.]

4. The plans will be devolved to a review commission – a neat way of absolving responsibility for the policy this side of an election.

It is arguable whether any bringing forward of the retirement age does represent any break with the pensions consensus developed around the Pensions Commission – Turner himself argued back in June that the state retirement age would need to rise faster. And it has been suggested that Turner himself may well lead the Tories’ review commission. At the same time, it is also true that all parties are committed to an increase in the retirement age – that’s what consensus is all about. What is different is the Tories’ plans to bring this forward specifically on account of the hole in the national finances left by the mistakes of corporate UK (and corporate USA).

Slowly, the battle lines are becoming clearer.

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Written by Calvin

06/10/2009 at 10:39 am

Posted in Pensions, Politics

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