October 25, 2010 Leave a comment
The good old Daily Mail has done itself proud again with an article entitled Women pay price of retirement at 66 in Osborne’s sneaky pension age hike.
Let’s disregard the issue of whether Mr Osborne’s decision does or does not represent “a sneaky hike” bearing in mind that the previous Labour government had already decided to increase women’s pension age gradually from 60 to 65 between 2010 and 2020, and to 66 between 2024 and 2026.
The complaint against this article is that it, as so many others, confuses the issues of retirement and pension provision. It states:
“Campaigners and experts said it was grossly unfair that those who have worked hard all their lives will have to struggle on… when they had hoped to be enjoying dreams of retirement.”
Two elements in that statement represent the crux of the issue: “will have to struggle on” and “dreams of retirement”.
First of all, retirement means stopping work – whether or not that work is for your long-term employer, or other work that you do after that. No one can force you to keep working; if you have the means to support yourself financially you can stop working, i.e. retire, whenever you like. And now that the government is abolishing Default Retirement Age, most people can now continue to work as long as they like if they have a job.
State pension provision relates to the age at which those who have worked are entitled to receive a fairly derisory amount from the government in the form of a pension. Until recently, women could start receiving their state pension – currently worth £97.65 a week – at the age of 60.
The article quite rightly states that although not everybody will have to keep on working, millions of women won’t have a choice because they simply cannot afford to retire before their state pension starts to pay out. But it’s pushing the bounds of credulity to suggest that a situation of living on £97.65 could equate to “dreams of retirement”.
What is really meant by this statement is illustrated by the case studies of two women included in the article – one of whom is 58 and the other 54 – who will now retire at different ages. Both women have a company pension but say they need the money from their state pension before they can afford to retire.
One will have to work longer before qualifying for the state pension, delaying plans “to indulge a passion for scuba diving”. Meanwhile, the other, who will still retire at 62 “intends to spend as much time as possible playing golf, especially on foreign holidays”. These are “dreams of retirement”.
All well and good – and good luck to them. But one has to question the role of the state pension in supporting these dreams. And the idiocy of suggesting that for people such as this delaying the receipt of a state pension is somehow “a cruel blow”. If these ladies were to rein in their aspirations they could probably – like millions of others –afford to retire right now. You pays your money – you takes your choice.