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We are entering the age of no retirement.

The journey into that

chilling reality is not a long one: the first generation who will
experience it are now in their 40s and 50s. They grew up assuming
they could expect the kind of retirement their parents enjoyed –
stopping work in their mid-60s on a generous income, with time and
good health enough to fulfil long-held dreams. For them, it may
already be too late to make the changes necessary to retire at all.

In 2010, British women got their state pension at 60 and men got
theirs at 65. By October 2020, both sexes will have to wait until they
are 66. By 2028, the age will rise again, to 67. And the creep will
continue. By the early 2060s, people will still be working in their 70s,
but according to research, we will all need to keep working into our
80s if we want to enjoy the same standard of retirement as our

This is what a world without retirement looks like. Workers will be

unable to down tools, even when they can barely hold them with
hands gnarled by age-related arthritis. The raising of the state
retirement age will create a new social inequality. Those living in
areas in which the average life expectancy is lower than the state
retirement age (south-east England has the highest average life
expectancy, Scotland the lowest) will subsidise those better off by
dying before they can claim the pension they have contributed to
throughout their lives. In other words, wealthier people become
beneficiaries of what remains of the welfare state.

Retirement is likely to be sustained in recognisable form in the short

and medium term. Looming on the horizon, however, is a complete
dismantling of this safety net.

For those of pensionable age who cannot afford to retire, but cannot
continue working – because of poor health, or ageing parents who
need care, or because potential employers would rather hire younger
workers – the great progress Britain has made in tackling poverty
among the elderly over the last two decades will be reversed. This
group is liable to suffer the sort of widespread poverty not seen in
Britain for 30 to 40 years.

Many now in their 20s will be unable to save throughout their youth
and middle age because of increasingly casualised employment,
student debt and rising property prices. By the time they are old,
members of this new generation of poor pensioners are liable to be,
on average, far worse off than the average poor pensioner today.
A series of factors has contributed to this situation: increased life
expectancy, woeful pension planning by successive governments, the
end of the final-salary pension scheme (in which people got two-
thirds of their final salary as a pension) and our own failure to save.

For two months, as part of an experiment by the Guardian in

collaborative reporting, I have been investigating what retirement
looks like today – and what it might look like for the next wave of
retirees, their children and grandchildren. The evidence reveals a
sinkhole beneath the state’s provision of pensions. Under the weight
of our vastly increased longevity, retirement – one of our most
cherished institutions – is in danger of collapsing into it. Many of
those contemplating retirement are alarmed by the new landscape. A
62-year-old woman, who is for the first time in her life struggling to
pay her mortgage (and wishes to remain anonymous), told me: “I am
more stressed now than I was in my 30s. I lived on a very tight
budget then, but I was young and could cope emotionally. I don’t
mean to sound bitter, but I never thought I would feel this scared of
the future at my age. I’m not remotely materialistic and have never
wanted a fancy lifestyle. But not knowing if I will be without a home
in the next few months is a very scary place to be.”

And it is not just the older generation who fear old age. Adam Palfrey
is 30, with three children and a disabled wife who cannot work. “I
must confess, I am absolutely terrified of retirement,” he told me. “I
have nothing stashed away. Savings are out of the question. I only
just earn enough that, with housing benefit, disability living
allowance and tax credits, I manage to keep our heads above water. I
work every hour I can just to keep things afloat. There’s no way I
could keep this up aged 70-plus, just so that my partner and I can live
a basic life. As for my three children … God knows. I can scarcely
bring myself to think about it.”

It is not news that the population is ageing. What is remarkable

is that we have failed to prepare the ground for this inevitable change.
Life expectancy in Britain is growing by a dramatic five hours a day.
Thanks to a period of relative peace in the UK, low infant mortality
and continual medical advances, over the past two decades the life
expectancy of babies born here has increased by some five years. (A
baby born at the end of my eight-week The new retirement series has
a life expectancy almost 12 days longer than a baby born at the start
of it.)
In 2014, the average age of the UK population exceeded 40 for the
first time – up from 33.9 in 1974. In little more than a decade, half of
the country’s population will be aged over 50. This will transform
Britain – and it is no mere blip; the trend will continue as life
expectancy increases. This year marked a demographic turning point
in the UK. As the baby-boom generation (now aged between 53 and
71) entered retirement, for the first time since the early 1980s there
were more people either too old or too young to work than there were
of working age.

The number of people in the UK aged 85 or more is expected to more

than double in the next 25 years. By 2040, nearly one in seven
Britons will be over 75. Half of all children born in the UK are
predicted to live to 103. Some 10 million of us currently alive in the
UK (and 130 million throughout Europe) are likely to live past the age
of 100.

Governments see raising the state retirement age as a way to cover the
cost of an ageing population

The challenges are considerable. The tax imbalance that comes with
an ageing population, whose tax contribution falls far short of their
use of services, will rise to £15bn a year by 2060. Covering this gap
will cost the equivalent of a 4p income tax rise for the working-age

It is easy to see why governments might regard raising the state

retirement age as a way to cover the cost of an ageing population. A
successful pursuit of full employment of people into their late 60s
could maintain the ratio of workers to non-workers for many decades
to come. And were the employment rate for older workers to match
that of the 30-40 age group, the additional tax payments could be as
much as £88.4bn. According to PwC’s Golden Age Index, had our
employment rates for those aged 55 years and older been as high as
those in Sweden between 2003 and 2013, UK national GDP would
have been £105bn – or 5.8% – higher.There are, of course, problems
to this approach. Those who can happily work into their 70s and
beyond are likely to be the privileged few: the highly educated elite
who haven’t spent their working lives in jobs that negatively affect
their health. If the state pension age is pushed further away, for those
with failing health, family responsibilities or no jobs, life will become
very difficult.

The new state pension, introduced on 6 April 2016, will be paid to

men born on or after 6 April 1951, and women born on or after 6
April 1953. Assuming you have paid 35 years of National Insurance, it
will pay out £155.65 a week. The old scheme (worth a basic sum of
£119.30 per week, with more for those who paid into additional state
pension schemes such as Serps or S2P) applies to those born before
those dates.

Frank Field, Labour MP and chair of the work and pensions select
committee, told me that the new figure of just over £8,000 a year is
enough to guarantee all pensioners a decent standard of living: an
“adequate minimum”, as he put it. Anything above that, he said,
should be privately funded, without tax breaks or other government

“Once the minimum has been reached, it’s not the job of government
to bribe people to save more,” he says. “To provide luxurious pension
payments was never the aim of the state pension.”

Whether the new state pension can really be described as a

“comfortable minimum” turns out to be a matter of opinion. Dr Ros
Altmann, who was brought into government in April 2015 to work on
pensions policy, is the UK government’s former older workers’
champion and a governor of the Pensions Policy Institute. When I
relayed Field’s comments to her, she was left briefly speechless. Then
she managed a “wow”. “Did he really say that? Would he be happy to
live on just over £8,000 a year?” she asked, finally.

Tom McPhail, head of retirement policy at financial advisers

Hargreaves Lansdown, is clear that the new state pension has not
been set at a high-enough level to guarantee a dignified older age to
those who have no other income. “How sufficient is the new state
pension? That’s an easy one to answer: It’s not,” he said.

Field makes the assumption that people have enough additional

private financial ballast to bolster their state pensions. But the reality
is that many people have neither savings – nearly a third of all
households would struggle to pay an unexpected £500 bill – nor
sufficient private pension provision to bring their state pension
entitlement up to a level to ensure a comfortable retirement by most
people’s understanding of the term. In fact, savings are the great
dividing line in retirement, and the scale of the so-called “pension
gap” – the gap between what your pension pot will pay out and the
amount you need to live comfortably in older age – is shocking.

Three in 10 Britons aged 55-64 do not have any pension savings at all.
Almost half of those in their 30s and 40s are not saving adequately or
at all. In part, that is because we underestimate the amount of money
we need to save. According to research by Saga earlier this month,
four in 10 of those aged over 40 have no idea of the cost of even a
basic lifestyle in retirement. When it came to understanding the size
of the total pension pot they would need to fund retirement, over
80% admitted they had no idea how big this would need to be.

Retirement is an ancient concept. It caused one of the worst

military disasters ever faced by the Roman empire when, in AD14, the
imperial power increased the retirement age and decreased the
pensions of its legionaries, causing mutiny in Pannonia and
Germany. The ringleaders were rounded up and disposed of, but the
institution remains so highly prized that any threat to its continued
existence is liable to cause mutiny. “Retirement has been stolen. You
can pay in as much as you like. They will never pay back. Time for a
grey revolution,” one reader emailed.

It was in 1881 that the German chancellor, Otto von Bismarck, made
a radical speech to the Reichstag, calling for government-run
financial support for those aged over 70 who were “disabled from
work by age and invalidity”.

The scheme wasn’t the socialist ideal it is sometimes assumed to be:

Bismarck was actually advocating a disability pension, not a
retirement pension as we understand it today. Besides, the
retirement age he recommended just about aligned with average life
expectancy in Germany at that time. Bismarck did, however, have a
further vision that was genuinely too radical for his era: he proposed
a pension that could be drawn at any age, if the contributor was
judged unfit for work. Those drawing it earlier would receive a lower


This notion is surfacing again in various forms. The New Economics

Foundation isarguing for a shorter working week, via a “slow
retirement”, in which employees give up an hour of work per week
every year from the age of 35. The idea is that older workers will
release more of their work time to younger ones, which will allow a
steady handover of retained wisdom. A universal basic income,
whereby everyone receives a set sum from the state each year,
regardless of how much they do or don’t work, might have a similar
effect, enabling people to move to part-time work as they age.

Widespread poverty among the over-65s led to the 1946 National

Insurance Act, which introduced the first contributory, flat-rate
pension in the UK for women of 60 and men of 65. At first, pension
rates were low and most pensioners did not have enough to get by.
But by the late 1970s, the value of the state pension rose and an
increasing number of people – mainly men – were able to benefit
from occupational pension schemes. By 1967, more than 8 million
employees working for private companies were entitled to a final-
salary pension, along with 4 million state workers. In 1978, the
Labour government introduced a fully fledged “earnings-linked” state
top-up system for those without access to a company scheme.

With pension payments now at a rate that enabled older people to

stop work without risking penury, older men (and to a lesser extent
older women) began to enjoy a “third age”, which fell between the
end of work and the start of old age. In 1970, the employment rate for
men aged 60-64 was 81%; by 1985 it had fallen to 49.7%.

Access to a comfortable old age is a powerful political idea. John

Macnicol, a visiting professor at the London School of Economics and
author of Neoliberalising Old Age, believes that when jobs were
needed for younger men after the second world war, a “socially
elegant mythology” was created in which retirement was a time for
older workers to kick back and relax.

He believes that in the 1990s, however, the narrative was cynically

changed and the image of pensioners was deliberately altered: from
being poor, frail, dependent and deserving, to well off, hedonistic,
politically powerful and selfish. The notion of “the prosperous
pensioner was constructed in the face of evidence that showed exactly
the opposite to be the case”, he said, “so that the right to retirement
[could be] undermined: more coercive working practices, forcing
older people to stay in employment, could be presented as providing
new ‘opportunities’, removing barriers to working, bestowing greater
inclusion and even achieving upward social mobility”.


This change in attitude towards pensioners helped the government

bring in a hike in retirement age. In 1995, the Conservative
government under John Major announced a steady increase from 60
to 65 in the state pension age for women, to come in between April
2010 and April 2020. Most agreed that equalising the state pension
age was fair enough. What they objected to is that the government
waited until 2009 – a year before the increases were set to begin – to
start contacting those affected, leaving thousands of women without
time to rearrange their finances or adjust their employment plans to
fill the gaping hole in their income.

Then, in 2011 – when the state pension age for women had risen to
63 – the coalition government accelerated the timetable: the state
pension age for women will now reach 65 in November 2018, at
which point it will rise alongside men’s: to 66 by 2020 and to 67 by

When she retired from the ministry of work and pensions in 2016,
Ros Altmann stated that she was “not convinced the government had
adequately addressed the hardship facing women who have had their
state pension age increased at short notice”.

After surviving cancer at 52, Jackie Harrison, now 62, looked over
her savings and decided she could just about afford to take early
retirement. “I had achieved 36 years of national insurance
contributions,” she said. “I used to phone the Department for Work
and Pensions every year to ensure that I had worked enough to get
my full pension at 60.”

Then she was told her personal pension age was increasing from 60
to 63 years and six months. “I wasn’t eligible for any benefits because
of my partner’s pension, but I could nevertheless still just about
manage until the new state retirement age,” she said. But when she
was 58, the goalposts moved again – this time to 66. “I’d been out of
the workplace for so long that I didn’t have a hope of being able to get
back into it,” she said. “But nor did it give me enough time to make
other financial arrangements.”

Harrison made the agonising decision to raise money by selling her

family home and moving to a different city, where she could live more
cheaply. Her decisions had heavy implications for the rest of her
family – and the state. When she moved, she left behind a vulnerable
adult daughter and baby grandchild and octogenarian parents.

“This is not the retirement I had planned at all,” Harrison told me. “I
had loads of savings once, but now I live in a constant state of worry
due to financial pressures. It seems so unfair when I have worked all
my life and planned for my retirement. I just don’t know how I am
going to manage for another four years”. Women born in the 1950s
are already living in their age of no retirement.
In 2006, it became legal for employers to force their workers to
retire at the age of 65. A campaign led by Age Concern and Help the
Aged was swift and effective in its argument that the new default
retirement age law broke EU rules and gave employers too much
leeway to justify direct discrimination on the grounds of age. On 1
October 2011, the law was overturned.

Since then, Britain’s workforce has greyed almost before our eyes: in
the last 15 years, the number of working people aged 50-64
has increased by 60% to 8 million (far greater than the increase in the
population of people over 50). The proportion of people aged 70-74
in employment, meanwhile, has almost doubled in the past 10 years.
This trend will continue. By 2020, one-third of the workforce will be
over 50.

The proportional increase may be substantial, but it charts growth

from a low level. In empirical terms, the impact is less positive:
almost one-third of people in the UK aged 50-64 are not working. In
fact, a greater number are becoming jobless than finding
employment: almost 40% of employment and support allowance
claimants are over 50, an indication that many older people are
unable to easily find new and sustainable work.

This is unsustainable: by 2020, an estimated 12.5m jobs will become

vacant as a result of older people leaving the workforce. Yet there will
only be 7 million younger people to fill them. If we can no longer rely
on immigration to fill the gaps, employers will have to shed their
prejudices, workplaces will have to be adapted, and social services
will have to step in to provide the care that ageing people can no
longer give their grandchildren, ageing spouses or parents if they
remain in the workforce.

Forcing older people to work longer if they cannot easily do so can

cause more harm than good

But forcing older people to work longer if they cannot easily do so can
cause more harm than good. Prof Debora Price, director of
the Manchester Institute for Collaborative Research on Ageing, told
me: “There is evidence to suggest that opportunities for people to
work beyond state pension age might well be making inequalities
worse, since those able to work into later life tend to be men who are
highly educated and have been in higher-paid jobs.”

One answer is to return to Bismarck’s original plan, whereby the state

pension can be accessed early by anyone who chooses to collect a
smaller pension sum at an age lower than the state retirement age,
perhaps because of poor health or other commitments.

This option, however, was rejected last week by John Cridland, the
former head of the Confederation of British Industry’s business lobby
group, who was appointed by the government in March 2016 to help
cut the UK’s £100bn a year pension costs by reviewing the state
pension age.

Instead, Cridland has recommended that the state pension age

should rise from 67 to 68 by 2039, seven years earlier than currently
timetabled. This will push the state retirement age back for a year for
anyone in their early 40s. Cridland has rejected calls for early access
to the state pension for those in poor health, but has left the door
open for additional means-tested support to be made available one
year before state pension age for those unable to work owing to ill
health or caring responsibilities.

In spite of their anxieties about money, one of the things I have

been most struck by, in my many conversations with older readers, is
the pleasure they take in life.

One grandmother told me: “Last week, I swept across a crowded pub
to pick up a raffle prize … with my dress tucked into my knickers! A
few years ago I would have been mortified. Not any more. Told ’em
they were lucky it was cold and I had knickers on!”

Monica Hartwell, 69, is part of the team at the volunteer-run Regal

theatre in Minehead, as well as the film society and the museum.
“The joy of getting older is much greater self-confidence,” she told
me. “It’s the loss of angst about what people think of you: the size of
your bum or whether others are judging you correctly. It’s not an
arrogance, but you know who you are when you’re older and all those
roles you played to fit in when you were younger are irrelevant.”

The data bears out these experiences: 65 to 79 is the happiest age

group for adults, according to the Office for National Statistics.
Recently, a report claimed that women in their 80s have more
enjoyable sex than those up to 30 years younger. Other research has
found that 75% of those aged 50 and over are less bothered about
what people think of them and 61% enjoy life more than when they
were younger.
So what is the secret to a successful retirement? Private companies
run courses to help those on the verge of retirement plan for changes
in income, time and relationships. I have spoken to those running
such courses, as well as those who have retired. The consensus is that
there are five pillars, all of which rest on the “money bit” – the basic
level of financial security without which later life is hard. Once that
foundation is in place, retirees can build up the second pillar: a social
network to replace their former work community. The third pillar is
having purpose and challenging one’s mind. Fourth is ongoing
personal development – exploring, questioning and learning are an
important part of what makes us human; this should never stop, I
was told. The fifth and final pillar is having fun.

I tried explaining final-salary pensions to a 20-year-old

recently. They looked at me quizzically, as though I was telling them
that I had seen a unicorn. When that same 20-year-old, however,
tries to explain the traditional concept of retirement to their own
children, they might well be met with the same level of


For their children, life might well be more like the joke that Ali
Seamer emailed to me during a recent Q&A I ran with readers as part
of my investigation into what retirement means today: “I’m going to
have to work up to 6pm on the day of my funeral just to be able to
afford the coffin,” he said.

In examining the reality of this new age of no retirement, I have

become aware of two pitfalls undermining constructive debate. The
first is the prejudice that an ageing population will place a huge
burden on society.

This is refuted by numerous studies: the volunteer charity WRVS has

done the most work to quantify the economic role played by older
generations. Taking together the tax payments, spending power,
caring and volunteer efforts of people aged 65-plus, it calculates that
they contribute almost £40bn more to the UK economy than they
receive in state pensions, welfare and health services.

The research suggests that this benefit to the economy will increase in
coming years as increasing numbers of baby-boomers enter
retirement. By 2030, it projects that the net contribution of older
people will be worth some £75bn.
Older people’s contribution to society is not just economic. An ICM
poll for the WRVS study found that 65% of older people say they
regularly help out elderly neighbours; they are the most likely of all
adult age groups to do so.

The second pitfall is the conflict between generations that can be

caused by the issue of retirement. The financial problems of the
young have been blamed on baby boomers. But the truth is that the
UK pension languishes far below that which is provided in most
developed countries. And this contributory, taxed income –
pensioners pay tax just like anyone else – is all that many old people
have to live on.

Nearly 2 million of those aged 55-64 do not have any private pension
savings and despite the commonly held belief that older people are all
mortgage-free, fewer than 48% of those aged 55-64 own their own
homes outright and nearly a quarter are still renting. It is true that
some have benefitted greatly from rises in house prices, but the cost
of lending was high – often 10% or more – during the 1970s and
1980s. One in 10 of those aged 65 and over still have a mortgage.

For all the recent talk of the average pensioner household being £20
a week better off than working households, the truth is that many are
actually working to supplement their income. Still, to people just
entering the workforce, the lives of today’s pensioners look
impossibly privileged.

Rachael Ingram sums it up. At 19, working full-time and studying for
an Open University degree, she is already putting 10% of her income
aside for her pension. “I shouldn’t be worrying about saving for my
pension at my age,” she told me. “I’m saving money that could go
towards a deposit for my first house – I’m currently renting a flat in
Liverpool – or out socialising. But I have no faith in government or
the state pension. There will be no one to look after me when I’m