Sunday, December 18, 2005

State pension: why the problem?

It was the 1925 Contributory Pensions Act that first enshrined 65 as the pensionable age for men, though it was 1946 before the scheme became universal.

In 1925 act, the life expectancy of a newborn male baby was about 56. Retirement was never envisaged as a stage that almost everyone would reach - and even those who did so could not expect to enjoy it for more than around 11 years, on average.
Compare that with today. Since 1946, life expectancy at birth has increased by about 10 years, and people who reach 65 can look forward, on average, to almost two more decades of life.

Apply the same reasoning as in 1946, and we would not be arguing about a rise in pension age from 65 to 67. We would be talking about working until you were 75 or 80, today's life expectancies for British men and women. Much as that might thrill the Treasury, it is a suggestion that would, one suspects, put the current furore in a certain amount of perspective.

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