Ruth Wishart: Principle on which we base the state pension is flawed

(In his new book on the Labour Party and all its works David Kogan says that while it might seem to resemble Game of Thrones, the Tories do a pretty good turn as the Borgias!) But Mr Duncan Smith, for it is he, is still the founder and, ahem, brains behind the Centre For Social Justice (CSJ), which some folks claim is a tank which does some solid thinking about what currently ails the policy devising world.

And IDS’s tank has a brand new thought. The CSJ, in its caring, sharing way, has decided that older workers are being discriminated against. Here they are, fit and healthy and raring to go, and the employment market place is cruelly refusing to recognise their skills.

It is simply not “responding to the needs and potential of an ageing workforce”. And it recommends helping older folks “access the benefits of work” with increased training and flexible hours and all that jazz.

READ MORE: People will not have to work until 75 in an independent Scotland

I’m guessing you are sniffing a wee snag. And you would not be wrong, Sherlock. The rather sizeable insect in this ointment jar is the suggestion that the pension age be raised to 75 by 2035. Three score years and 15, trumping biblical expectations of even your survival chances.

But the CSJ has arguments to back itself up: “Removing barriers for older people to remain in work has the potential to contribute greatly to the health of individuals and the affordability of public services.”

Note well those last five words. They indicate, as with most Tory tinkering on the welfare front, that the motivation bears scant resemblance to creating a healthier populace and rather more to creating a wealthier Treasury. For we have travelled this road before. Each time the pension age has crept up, the clarion cry has gone out that, since 60 is the new 40, it’s time to give the crumblies an even break.

And, in the interests of balance, it should be noted that while the Tories wanted to equalise the pension age to 65 in the mid-1990s, a subsequent Labour administration said it should be 66. But then along came George. Under Mr Osborne’s 2011 Pensions Act, the goalposts were swiftly moved yet again, so that the increase in women’s retirement age would be hastened. Unfortunately the masterplan didn’t include much in the way of early warnings. In fact, at the time the then chancellor was boasting of the massive savings to be made, many of the people providing them were blissfully unaware they were to spend more years at work before picking up a pension.

Some of the so-called WASPI (Women Against State Pension Inequality) women – born in the 1950s and the first to be caught in the net – found all their calculations about earnings and income thrown into expensive disarray. Some are missing out on as much as £45k of state pension. A judicial review into their case finished this summer and they await the report.

And there is another factor in play here. The UK pension, whenever it kicks in, is not exactly wealth beyond the dreams of avarice. The UK pension is worth just 29% of average earnings compared to 100% in the Netherlands and more than 93% in perennially cash strapped Italy. Without any private provision over and above, pensioner poverty is more or less guaranteed.

Not, of course, for the likes of Messrs Duncan Smith, and Osborne, neither of whom are wondering where their next luncheon voucher is coming from. And even if you had enough disposable income to finance private provision as a top-up, a lot of savings will buy you a frighteningly small additional income.

READ MORE: What’s the state pension like in other countries across the world?

And then there was Uncle George’s subsequent electric lightbulb moment when he gave pension savers the “freedom” to access their pot with no obligation to buy an annuity. Enter a posse of scamsters and shysters who have, quite literally, stolen people’s hard-earned savings by cold calling with fake schemes. You kinda think the man in charge of the nation’s kitty might have had the nous to work that one out.

But the whole principle on which we base the state pension is flawed at base camp by utilising a statutory cut-off point. Life expectancy varies by more than 10 years just between different districts in Scotland’s major cities. Leafy suburbia buys you more time on Earth and has done so since the 1980 Black Report on health inequalities first shocked us into comprehension (but not enough compassion).

What also matters, self evidently, is what you have been doing with your employment life. Someone working on building sites for decades is likely to have more health issues than someone tapping laptops over the same period. So here is a public health warning. If a Conservative government, or its offshoot workers labouring in think tankery, come up with something they say is born solely out of concern for your wellbeing, check the label.

You’ll find it says snake oil.