The UK government’s recent plan to increase the state pension age to 71 has sparked a maelstrom of criticism. Pushing more seniors into poverty. Prominent critics have argued that this policy change would further impoverish seniors. Beginning in April, the average state pension will increase by 8.5%, to just over £11,500 per year. That sum is far below what it will take for people to make ends meet.
Today, almost 11 million people aged 65 and over account for 19% of the UK population. Statistics indicate that in a decade, this number is expected to rise to almost 13 million, constituting 22% of the population. As the rapidly increasing demographic of retirees compels questions on the sustainability of pensions and adequacy of retirement income.
According to their research, it takes at least £31,300 a year for one person to have a comfortable retirement. This figure is £8,000 higher than the current state pension. Furthermore, couples require around £43,100 to feel equally comfortable. One quarter of our pensioners are already in poverty. Increasing the state retirement age would further exacerbate this issue.
These restrictions take a heavy toll on women. They typically have to save an additional 19 years just to catch up the pension savings of men. The pandemic has only exacerbated the harsh realities that many women retirees already experience, as shown through the pension savings gap. They are often dependent on a fixed, modest income that can’t stretch to meet soaring costs of living.
The Institute for Fiscal Studies agrees predicting a “welfare explosion”, predicting state pensions and pension benefits to increase greatly. By 2050, they are forecasting a £45 billion uplift. Public finances will come under ever-greater strain from health and social care. This public sector net financial pressure is set to increase by £105 billion over the same period. With the aging population set to increase significantly over the coming decades, so too will the impact on our public services.
The proposals to raise the state retirement age will only hit those in their early 50s and below. Advocates for seniors argue that delaying access to pensions will disproportionately impact those with health issues and those already experiencing financial strain.
“The proposals will considerably add to the number of pensioners living in poverty,” said Jan Shortt, general secretary of a major organization advocating for seniors’ rights.
“Making those already living with ill-health wait even longer to claim their pension will only increase poverty and the demand on already-creaking services, such as health and care.” – Jan Shortt
Former pensions minister Ros Altmann has raised similar concerns about the intended changes. She continued by calling the move to raise the state pension age to 71, “Unconscionable.” This is magnified when you realize that only the healthiest 10% of the UK population remains healthy up to age 72.
“Only the top 10% of the UK population stay healthy into their early 70s, so cutting costs by making unwell workers wait longer favours the well-pensioned, higher paid.” – Ros Altmann
Advocates say pushing back pension eligibility risks a dramatic increase in elderly poverty. They argue that it is insufficient to simply claim that the country cannot afford the pensions bill for an aging population.
“The nation won’t be able to afford an epidemic of elder poverty and illness in the next decade if they do nothing.” – Jan Shortt