Progress | Centre-left Labour politics

Bold thinking on pensions

Britain needs flexible retirement ages that reflect the complex and differing needs of the world of work in the 21st century, argues Progress strategy board member Sheila Gilmore

In 2011, I was privileged to serve on a pensions bill committee with the late Malcolm Wicks. Not all former ministers seemed keen to serve as ordinary backbench committee members. Wicks not only did this but he was also full of ideas. This was the bill which, among other things, sought to accelerate the equalisation of male and female pension ages. Now we have another proposed acceleration of a rise in pension age.

Wicks proposed an amendment that the age of retirement be linked to years worked. His argument was that those in unskilled, often heavy work, were the most likely to have started work at an early age. They were also the most likely to suffer health problems at an earlier age, and to have a lower life expectancy. Wicks did not suggest he had a perfect solution, but he wanted this to be fully researched.

At that time there had been a very marked upwards spike in life expectancy which had been much faster than anticipated, and many commentators were expressing concerns that this would continue. In fact, as we now know, the rate of increase has slowed  In 2011, the government gave assurances that future pension age increases would be reviewed in the light of the evidence.  It was always possible that life expectancy could plateau after the spell of rapid increase, even without changes to policy which may have contributed to this. Hence the undertaking to do a review – but it appears the review that was done earlier this year was not in possession of all the evidence.

This would be a good time to look again at the ideas Wicks was putting forward. There are jobs which can be continued well into later life, and people whose health makes that relatively easy, and perhaps for them desirable. This is simply not the case for all. While some of the most damaging manual jobs may be diminishing, work in caring for example can involve lifting and helping people mobilise, as well as travel between jobs, in many cases by walking and public transport.

There are nearly 350,000 people over 60′ in receipt of employment and support allowance. This number will rise further as the option for men in poor health and low income to claim pension credit instead is progressively removed as women’s pension age (to which it was tied) rises.

In making decisions about pension age, government needs to set the costs of other benefits being paid out against any projected savings. For many, these years eat into what savings they may have. Many recipients in the so called ‘work related activity group’ of ESA lose benefit after a year if they have a small pension or a working partner. Loss of savings could mean a greater dependence on public funds later in life, so again the ‘savings’ to government may be less than they appear at first sight .

And this is without touching on the human cost of having to go through the treadmill of repeated assessments, with all the associated stress and anxiety. Most members of parliament, even Tory ones, must have met constituents whose health is poor but who have not even qualified for ESA and are on the JSA treadmill instead, being expected to apply endlessly for work which as they get older it is increasingly unlikely they will find.

Looking at a formula which could look at years of work, not just degree of ill health would also help prevent some people slipping into serious ill health sooner than they need to.

If the government will not look properly at the real costs to society as well as to individuals of marching on down the path of ever-rising pension ages, then Labour must do it. Debbie Abrahams, Labour’s shadow secretary of state for work and pensions has said we favour flexibility. We need to develop costed proposals for flexible retirement ages which reflect the complex needs of real people. If we work on this now we will be ready to put it into practice in government. Who knows too whether some of our ideas might not get adopted in a hung parliament? When we go down this road, I am sure Malcolm’s spirit will be smiling gently and urging us on.


Sheila Gilmore is a member of the Progress strategy board. She tweets @SheilaGilmore49



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Sheila Gilmore

is the former member of parliament for Edinburgh East

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