Retiring at 66, 67 or even 70 plus?

Over the last few days we have been hearing a lot about the proposed changes to the retirement age. For men that is likely to start going up from 2016 to 66 and then progressively until the age of 70 or even later.

The issue I have is that the idea is fine, as it does save the taxpayer a huge amount of money, but only if there is sufficient jobs available.

Currently the National Office of Statistics reports that 28.86 million people are in work. If we assume that the average person works from the age of 20 to 65, a total of 45 years, then one extra year represents a lengthening of the average working life by 2.22%.

Not much you might say, but that represents over 600,000 extra jobs required each year for each year the pensionable age is increased.

We already have 2.47 million people unemployed with 1.48 million on unemployment benefit looking for work. The number of people unemployed for more than twelve months increased by 85,000 over the last quarter to reach 772,000, the highest figure since the three months to April 1997.

It is reported that during the three months up until May 2010 there was a total of 492,000 vacancies. That is 5.2 unemployed people per vacancy.

If we introduce a further 600,000 jobs required by raising the retirement age, what will that achieve short of increasing the number on unemployment benefit by a huge amount. Of course the current benefit paid to the unemployed (£64.30) is a lot less than that paid as pension (£95.25) ... so the tax payer will save money (£30.95), which is around £1 billion per year.

My other concern is that if people retire at 66, 67 or later then there will be a number of years when very few people will retire and vacate their jobs. These vacated jobs make way for others to be promoted, effectively shuffling everyone one up the employment ladder, perhaps allowing them to earn a little more money, and save a little more for their non state (and state) pension.

This shuffling effect goes right down through the ranks and ages, making space at the bottom for new people. Those new people are our young people finishing school and university.

If this happens the number of unemployed at the younger end of the market will rise dramatically. These are the people who really need to get work and earn themselves a good living, as they have their whole lives ahead of them.

The issue appears to simply be that if we create additional working years (approx 600,000 for each year the pension age is raised) we need to create additional jobs to absorb those years. We are already around 2.5 million jobs short so this is just making the problem worse.

Pumping money into the state system to cover unemployment is short sighted. Surely what we need to do is create more jobs, probably between 3 and 5 million over the next five to ten years.

How?

So much of our manufacturing and services have gone overseas because labour is much cheaper and everyone is interested in reducing costs to a minimum.

Increasing taxes on a sliding scale on the profits of businesses who import goods that we could make ourselves would help.
Introduce import taxes on all imported goods that could be made in the UK. That’s not on materials, services or products that we cannot make, but on those than we can.

Reduce the cost of production in the UK by cutting bureaucracy, cutting manufacturing costs, business rates and encouraging manufacturing all in areas again.

Using some of that money saved to encourage manufacturing in the UK. After all we are a leading nation when it comes to science and technology, once we were the worlds’ leading industrialised nation until we threw it all away in favour of the service industries such as banking! Sorry!
Surely it can’t be that hard to reduce the difference in cost between manufacturing here in the UK and that of some cheaper nation considering transportation and environmental costs, possible tax advantages and incentives to UK manufacturers.

The new government is full of ideas, but is it really looking at the long term affect of what it plans to do.

Based upon material from Office for National Statistics - Published on 16 June 2010 at 9:30 am

Getting Work at 60 Plus – Depressing or What?

My current job as a Data Manager (Maternity Cover) at the well known independent King Edward VI School in Southampton finishes at the end of this term in early July. In preparation for that event I have been searching for a new position.

Now I know that times are tough and that jobs are difficult to get whatever your age, but that is not really my concern. I want to work and even the government is trying to encourage people to work past 65 so that the huge cost of providing state pensions is reduced. I for one have no problem with that idea, after all … if I can continue working at something that I enjoy and at the same time continue to bring an income into the home, then why not?

Of course, if I had a nice fat private pension then I could stop working and enjoy myself even more. Sadly that is not so in my case and many others are also discovering that their pensions are not quite as ‘fat’ as they had hoped!

Yes, I will have a small pension plus the state pension at 65, but that amounts to barely enough to exist on. What is worse … I will have much more time on my hands with a lot less money to spend on filling those hours.

Now please do not shout at me, I’m not blaming anyone other than myself. My point is that I really do want to keep on working … but there is just nothing available and where there is, there are plenty of younger and more paper qualified people than me. Many advertised jobs I could do easily - but they demand a degree or some other qualification, a number of years experience, are only part time or pay unfair low wages.

Experience seems not to count for much anymore.
I have a wealth of business experience, business development, IT and people skills. I’ve even run my own businesses, some with a good level of success and others … well not so good perhaps!

Once upon a time I was top of my profession as a software developer. Today that technology has long gone and the new technologies are very complex and almost exclusively done by the younger generation who received quality teaching and guidance in their chosen areas. I learnt my skills by reading the software manufacture’s manuals … there were no training courses as software development was so very new back then.

The point is this - as my life moved forward my work became more generalised. I moved from being a software developer to being a manager, then to being a company director. The roles became much wider and less specialised, the earnings rose exponentially as the responsibilities increased. This is a quite normal pattern of things for people who have been working during the last 30 to 40 years or so.

Of course if you do these things within some large corporate business then you are likely to end up nearer the top with a great income and an amazing pension plan. But, if like so many of us you do this yourself, running a small business, struggling from one month to the next then it is often very different. Yes we have our freedom; we have the right to make our own decisions but often we operate within our own limited knowledge and make the wrong decisions as a result.

Today’s young people are much more likely to be professionally trained and keep working with the skill sets they were trained in and continued to develop over the years. Companies are bigger, structures much stronger and individual careers planned and developed to a much higher degree.
I’m not scared of taking any job that I can do, even if it only pays the minimum wage, but what does that do to my self esteem. What happened to all those dreams of success … those desires that we all secretly have, to own that special car and country home, or having our own business and financial independence.

As we get older we also have the issues of declining health, the added restrictions that age brings, the powerlessness to carry out heavy work, failing eye sight and hearing and the general decline of our bodies.
These frustrations are not made any easier when we are also hounded by the inability to find work that we are able to do; we would enjoy doing and that pays a reasonable wage.

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