retire or not to retire – but will there be a pension?

2
Editorial Retire or not to retire – but will there be a pension? It would appear that the European Union and the UK coalition government has at last begun to grasp the reality of our ageing population with its sub- stantial life expectancy and the increasing burden on the state to provide support in health and wel- fare. This is being particularly compromised by the fact that there is a decreasing working population to support this cohort of people but also the fragility of the economic situation in most developed countries due to the credit crunch where harsh choices are having to be made. It is not a case of one choice or another or just cutting back but the virtual removal of significant parts of the social and welfare structure. In Scotland, where there has been a major move over the last few years to free eye checkups and medical prescriptions with significant financial support for older people in care, there is now a major debate taking place which could easily result in most of these dis- appearing as there is simply no money to pay for them. When the original age was set for retirement and the receipt of a state pension only a very small proportion actually reached that age as life expec- tancy was relatively low. However, with the improvement in living conditions, diet and medical support, life expectancy has increased significantly such that many people are still having a very active life well into theirs 70s and 80s. As a result many more are claiming a pension and social support from the welfare state, the resources for which many are now realising are finite. At present the retirement ages in Europe vary from one country to another ranging from 57 in the Czech Republic to 66 in Denmark for women and 60 in France and 66 in Denmark for men. A deci- sion has been made that the retirement age will have to be raised but this may not be early enough to stave off major problems even if it is introduced rapidly. The next issue is to decide what this might be; some have suggested 68, others 70. The IE Business School in Madrid has reported that in Europe, although the current retirement age varies considerably from country to country, this does not actually mean the age that people stop working which is usually significantly earlier. For example, the average retirement age are 57 in Belgium and Luxembourg, 58 in France, 59 in Greece, Austria and Italy (similar to USA), 60 in Holland, Germany and Spain, 61 in Finland and Denmark, 62 in UK, Sweden and Portugal and 63 in Ireland. They also suggest that there is a need for a greater number of older people to stay in work but the number has in fact dropped significantly over the last 30 years, with countries such as Canada showing a fall of 27% and Germany 41% to give two examples. However, this is not uniform as in Estonia and Lithuania the average retirement age actually ex- ceeds the statutory retirement age. The European Commission has suggested that retirement ages should be raised on a regular basis so that no more than one third of adult life takes place in retirement. They have proposed that retirement should not start until at least 70 to achieve a ‘balance’ in the workforce. That is a very laudable suggestion but the implications for implementing such a proposal would seem to be significant. A complicating factor is the current financial difficulties that some countries in Europe are having and the reluctance of others to ‘bail out’ those whom they see as allowing people to retire at an earlier age and therefore having a higher social cost to meet. In the UK, the Work and Pensions Secretary, Mr Iain Duncan Smith, has suggested that there was a need to link the ‘state’ retirement age to life expectancy with proposals that the latter should be raised to 66 for men by 2016 and 2020 for women. It had originally been proposed that this might not be phased in until the mid 2020s or even 2030s. That is a very laudable suggestion but the impli- cations for implementing such a proposal would seem to be significant. This is all part of his review of the multiple benefits available to people in the UK with the proposal to simplify it into a single catch all process. It has been suggested by the British Chambers of Commerce that removal of the lower retirement age will increase the number of people wanting to work from the current 1.4 mil- lion which represents 12.4% of that age group. Age UK has also stated that in the last year, over 100,000 people were forced to retire against their will. Another of the issues that will be closely examined relates to those who have been out of work and on benefits for at least nine of the last ten years. The Government has just released figures showing that 25% of the UK population will be over 65 in 20 years’ time with some parts of the country potentially having 40%. It is figures such as these that go to show how immediate the issue has become. However, there is another problem which is now coming to the fore and should have been Ó 2010 The Author Journal compilation Ó 2010 The Gerodontology Society and John Wiley & Sons A/S, Gerodontology 2010; 27: 165–166 165

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Ed i to r ia l

Retire or not to retire – but will there be a pension?

It would appear that the European Union and the

UK coalition government has at last begun to grasp

the reality of our ageing population with its sub-

stantial life expectancy and the increasing burden

on the state to provide support in health and wel-

fare. This is being particularly compromised by the

fact that there is a decreasing working population

to support this cohort of people but also the fragility

of the economic situation in most developed

countries due to the credit crunch where harsh

choices are having to be made. It is not a case of

one choice or another or just cutting back but the

virtual removal of significant parts of the social and

welfare structure. In Scotland, where there has

been a major move over the last few years to free

eye checkups and medical prescriptions with

significant financial support for older people in

care, there is now a major debate taking place

which could easily result in most of these dis-

appearing as there is simply no money to pay for

them. When the original age was set for retirement

and the receipt of a state pension only a very small

proportion actually reached that age as life expec-

tancy was relatively low. However, with the

improvement in living conditions, diet and medical

support, life expectancy has increased significantly

such that many people are still having a very active

life well into theirs 70s and 80s. As a result many

more are claiming a pension and social support

from the welfare state, the resources for which

many are now realising are finite.

At present the retirement ages in Europe vary

from one country to another ranging from 57 in the

Czech Republic to 66 in Denmark for women and

60 in France and 66 in Denmark for men. A deci-

sion has been made that the retirement age will

have to be raised but this may not be early enough

to stave off major problems even if it is introduced

rapidly. The next issue is to decide what this might

be; some have suggested 68, others 70. The IE

Business School in Madrid has reported that in

Europe, although the current retirement age varies

considerably from country to country, this does not

actually mean the age that people stop working

which is usually significantly earlier. For example,

the average retirement age are 57 in Belgium and

Luxembourg, 58 in France, 59 in Greece, Austria

and Italy (similar to USA), 60 in Holland, Germany

and Spain, 61 in Finland and Denmark, 62 in UK,

Sweden and Portugal and 63 in Ireland. They also

suggest that there is a need for a greater number of

older people to stay in work but the number has in

fact dropped significantly over the last 30 years,

with countries such as Canada showing a fall of

27% and Germany 41% to give two examples.

However, this is not uniform as in Estonia and

Lithuania the average retirement age actually ex-

ceeds the statutory retirement age.

The European Commission has suggested that

retirement ages should be raised on a regular basis

so that no more than one third of adult life takes

place in retirement. They have proposed that

retirement should not start until at least 70 to

achieve a ‘balance’ in the workforce. That is a very

laudable suggestion but the implications for

implementing such a proposal would seem to be

significant. A complicating factor is the current

financial difficulties that some countries in Europe

are having and the reluctance of others to ‘bail out’

those whom they see as allowing people to retire at

an earlier age and therefore having a higher social

cost to meet.

In the UK, the Work and Pensions Secretary, Mr

Iain Duncan Smith, has suggested that there was a

need to link the ‘state’ retirement age to life

expectancy with proposals that the latter should be

raised to 66 for men by 2016 and 2020 for women.

It had originally been proposed that this might not

be phased in until the mid 2020s or even 2030s.

That is a very laudable suggestion but the impli-

cations for implementing such a proposal would

seem to be significant. This is all part of his review

of the multiple benefits available to people in the

UK with the proposal to simplify it into a single

catch all process. It has been suggested by the

British Chambers of Commerce that removal of the

lower retirement age will increase the number of

people wanting to work from the current 1.4 mil-

lion which represents 12.4% of that age group. Age

UK has also stated that in the last year, over

100,000 people were forced to retire against their

will. Another of the issues that will be closely

examined relates to those who have been out of

work and on benefits for at least nine of the last ten

years. The Government has just released figures

showing that 25% of the UK population will be

over 65 in 20 years’ time with some parts of the

country potentially having 40%. It is figures such

as these that go to show how immediate the issue

has become.

However, there is another problem which is

now coming to the fore and should have been

� 2010 The Author

Journal compilation � 2010 The Gerodontology Society and John Wiley & Sons A/S, Gerodontology 2010; 27: 165–166 165

anticipated. Many people who were looking for-

ward to retiring at a particular age are now not

taking very kindly to the expectation that they

will have to work longer and some younger peo-

ple feel that they will be kept out of a job by these

older working people. There is the potential for

people to stop working but that the state will not

provide a pension until some years later. Also it

would appear that many people in middle age

have not saved sufficiently for the time when they

will stop work and therefore will have to rely

more heavily on the state pension, but unfortu-

nately the latter is not at a level which most

would regard as being able to support a reasonable

standard of living. This presents a major problem

for the UK and for many other industrialised

countries.

It is interesting to note that in some professions,

age is not seen as a significant drawback and in fact

is looked upon as an advantage. This applies par-

ticularly to lawyers and judges and members of the

Roman Catholic Church. However, even here

retirement age has been set at 70 for judges and

priests and 75 for bishops and archbishops.

One clear insight as to where other industrial

countries may go in their population demo-

graphics is clearly shown by Japan. The Japanese

Ministry of Health has stated that life expectancy

for men is nearly 80 and for women it is greater

than 86 with more than 40,000 people being over

100 years of age. They expect by 2045 that the

life expectancy of women will reach 91 years and

the UN believes that the number of people in

Japan aged 100 years or more will reach 800,000.

In the UK, the Queen will be currently sending

out over 5,000 greetings to people over 100 years

and expectations are that this will rise to 75,000

by 2050. With regards to our profession, it is quite

a daunting thought that in the foreseeable future,

a significant minority of the patients we treat will

be over 100 years old and will have some of their

natural dentition!

‘Retirement is the ugliest word in the language.’

Ernest Hemingway (1899-1961)

James P. Newton

Editor

� 2010 The Author

Journal compilation � 2010 The Gerodontology Society and John Wiley & Sons A/S, Gerodontology 2010; 27: 165–166

166 Editorial