Put off your retirement with mid-life career switch

Pension tsar’s radical plea

PEOPLE in their late 50s and early 60s should be offered a mid-life career review to help them work for longer, the Government’s pension tsar said yesterday.

John Cridland said the pensions bill is spiralling out of control and millions of workers in late middle age may have to consider delaying retirement.

He said: ‘It’s not so many years ago that the prevailing culture wasn’t about working longer, it was about early retirement. Look how that has changed. Businesses I think are now recognising that their most productive workers are their older workers.’

The former CBI boss, who is leading an official review into whether the state pension age should rise further, said Britain needed to do much more to help people have extended working lives.

He said the cliff edge of retirement at 65 had gone for ever and warned that for many the dream of early retirement was no longer feasible. Mr Cridland suggested that careers advice could be given to those considering early retirement because they did not feel energetic enough to carry on in their full-time role, or because they felt they needed new skills.

He said that if employers offered more part- time and low- stress jobs, many more older workers would want to join the 1.2million already working past the state pension age.

Mr Cridland, 56, told an Age UK conference in London that the current pensions bill was arguably not sustainable because of how much it would rise by 2046 because of increased longevity.

He suggested that for every one year that average life expectancy goes up, people should expect to work for another eight months.

The comments will be seen as a hint that he will recommend that the state pension age, set to rise to 68 by 2046, should increase still further.

Mr Cridland said older people could stay in work to help train new apprentices. And he asked: ‘Where’s the mid-life career review which says if you’re going to be working for another ten years, what up-skilling do you need?’

He said the pension age may need to increase because a boy born in 2016 is expected to live for 90.5 years, and a girl for 93.5.

While there are now 300 pensioners to every 1,000 workers, this will soar to 357 within 30 years – meaning there are fewer people to pay the taxes to fund the pensions. And the ageing population means the 6.1 per cent of GDP that currently goes on pensions is set to rise to 7.6 per cent by 2046 if plans to set the state pension age at 68 by then are retained.

If the state pension age is increased in line with longevity, meaning that it would go to 68 five years earlier than planned, the cost will still make up 7.2 per cent of GDP. This would cost £20billion extra every year.

Mr Cridland also hinted that the triple lock raising the state pension each year by inflation, earnings or 2.5 per cent, whichever is highest, may not be affordable in the long-term and should be scrapped after 2020.

He also said help may have to be given to people in their 50s and 60s who have to take time off work to care for elderly relatives. And he said he would consider suggestions that teachers at inner-city comprehensives or nurses in A&E departments may not wish to work as long as others.

Work and Pensions Secretary Damian Green told the conference ‘you don’t help young people by impoverishing older people’ and it was ‘ridiculous’ to try to set generations against each other.

‘Cliff edge of retirement’