The benefits system needs to be reshaped to better aid older workers is an important conclusion of the Cridland review of state pension age to be published later today.
The full report will be published later this morning, so we only have the briefest details.
And, to be clear, the TUC doesn’t agree with several of his key conclusions:
We oppose Cridland’s proposed accelerated increase in the state pension age to 68 between 2037 and 2039. Under the 2007 PEnsions Act this was pencilled in for 2044 to 2046. Substantial inequalities in life expectancy and, particularly, healthy life expectancy mean this policy will hit the poorest hardest.
And we do not support the downgrading of the triple lock that currently governs rises in the level of the state pension in favour of an earnings link. The triple lock has been gradually bringing the state pension back up to a reasonable level. And its work is not done. The greatest potential beneficiaries of this policy are today’s young workers. There doesn’t need to be a trade-off between pension age and the level of the state pension.
Both these measures would, in practice, hit the future incomes of those currently in their 30s and 40s. This Generation X is already the worst placed of the generations in terms of workplace saving. And the poorest of this generation would be affected the most. For they are the least likely to be able to work into later life or have the substantial savings needed to cushion retirement ahead of state pension age.
But cutting through a debate too often characterised by hysterical and unhelpful claims of intergenerational conflict, Cridland’s first report showed a good understanding of the challenges faced by older workers and groups such as carers. And his final report contains some useful ideas that might help those who want to work in their later years but are hindered by inhospitable workplaces or an inflexible benefits system.
Among his plans include a new mid-life MOT to help people plan their later lives, addressing their lifestyle their skills, paid and unpaid work, and their retirement income. For this to work, the review would have to take place in a workplace setting. After all, an employer’s support is needed for adjustment to workplaces, moves to flexible working or training for a role more suitable for an older worker, which are all essential if they are to stay in the labour market. But the principle is a useful one and the logical extension of a policy the TUC has long championed.
Likewise, Cridland recognises that many older workers simply cannot stay in work. So he proposes additional means-tested support available one year before state pension age coming into effect after 2037 for those unable to work through ill health or caring responsibilities. This is too late. People face those challenges today. And one year would seem an excessively narrow window. But, again, implemented correctly this could provide the right kind of flexibility in the benefits system.
Likewise, his proposal for flexibility in the conditionality of Universal Credit for those approaching state pension age to allow part-time work could be another mechanism for allowing workers to continue to earn a wage and allow workplaces to continue to benefit from the skills and experience of its older employees.
TUC research published last year delved into the experience of older workers. We found that:
Cridland’s proposals would not overcome the problems caused by vast inequalities in wealth and health. But they go some way to meeting our demand that if, we want to maintain a stable dependency ratio – the number of workers compared to non-workers –we need to do far more than just hike up state pension age and hope for the best. This will lead to many facing hardship in their 50s and 60s. And society will lose their skills and their tax revenues.
We need policy interventions to overcome the barriers that many face. Several of these proposals are a good place to start.