Money talks
The French and the Irish are fighting pension age rises – will the British?
Britons have been browbeaten while our nearest neighbours go into battle against changes
by Patrick CollinsonWere you born after April 1978? Then you will be the first generation of both males and females who won’t receive a penny in state pension until you reach the age of 68 – and there is even talk of raising that to 70. Why have we so meekly accepted this when in Ireland and France it has reached the point of bringing down governments?
Sinn Fein’s extraordinary election victory in Ireland is widely seen as a protest vote against the disarray in public hospitals and soaring rents in urban areas. Yet the exit polls also revealed that plans to raise the state pension age in Ireland to 67 in 2021, and 68 in 2028 was the third most important issue among voters after health and housing. It far outstripped concerns over Brexit.
It played no small part in Sinn Fein’s victory, as it pledged to roll back the state pension age to 65. Sinn Fein leader Mary Lou McDonald said during the election campaign: “For us the idea that somebody would be forced to continue working until they’re almost 70, or that people of 65 or 66 will be sent down to the dole queues, it’s absolutely disgraceful.”
Many of my age brought up in the era of the Troubles are aghast at the prospect of Sinn Fein entering government in the Republic (and felt pretty much the same way about the DUP). But Sinn Fein leader Mary Lou McDonald successfully tapped into resentments brewing among working people in a country supposedly free of the “left behind” bitterness that characterises Britain. It seems almost every political party was taken aback by how frequently the pension age was raised on doorsteps during the election.
In our second nearest neighbour, France, the protests have gone on to the streets. The rail network has been paralysed, electricity supplies cut, and violent demonstrations met with police teargas. All this because Macron’s government is proposing that those born after 1974 won’t get a full pension (more generous than in the UK) until they are 64, at present 62. In Britain, we have been browbeaten by endless talk of the demographic time bomb; the idea that they’ll be trillions of elderly people and hardly any young workers coming up behind them to support pensions as before. There is no alternative, we’re told.
Yes, the population is ageing, and state pensions take up a vast proportion of public spending. But recent projections show that the population is ageing rather less fast than predicted. We don’t precisely know why – pick anything from austerity to obesity and diabetes – but that means there is more wiggle room about state pension ages.
Even in 2017, before the slowdown in longevity growth was part of the picture, the Office for Budget Responsibility and the EU were projecting that Britain’s demographic time bomb was much less explosive than elsewhere in Europe.
It projected that age-related expenditure on pensions would rise from 7.7% of UK GDP in 2010 to 9.2% in 2060. That’s an increase of 1.5% of GDP over a half century although that will, of course, be in part because of the measures we have already put in place. Other countries face much bigger forecast burdens; the Netherlands and Belgium are in the 8-10% range.
Yet Britain is fast-tracking to a pension age of 68 ahead of every other Western European country apart from Ireland. A Sinn Fein-style pledge to bring it back to 65 would be insanely costly. But let’s take a longer pause before needlessly pushing it to 68.