Old Before You Die? You'll Need To Be

Government Projections of a 0.1% fall in retirement costs as a % of GDP between 2010 and 2050 somehow make pensions unaffordable, apparently.

While claiming the recovery in the British economy is now firmly underway in his Autumn Statement this week, Chancellor George Osborne's Government slipped in the forecast, trailed in an anti-welfare speech he made a few days earlier, that the qualifying age for the state pension, already rising from 65 to 67, will apparently "need" to rise further to 70 and above in the coming decades. In future, Osborne has decided, if life expectancy rises, the pension age will be indexed to rise with it. Older folks are having the temerity to live longer and, if they are not working, they truly are a burden to our Not-So-Big Society, it seems.

For sometime, we have become accustomed to hearing the refrain that "it's great people are living longer, but...(we can't really afford them)." And on the face of it, it appears to be a logical argument - more people living longer but not working longer will mean an increase in costs. Sure. But there is a difference between an increase in expense and what is affordable especially if the overall economy continues to grow, which it is expected to do. For example, in the last 10 years, wealth in Britain has increased by over £60 billion, in spite of everything. But only £1 billion of this has gone to ordinary households in the form of income. The other £59 billion has gone to shareholders as dividends or higher valued stocks.

The fact is, there is plenty of wealth to go around and afford retirement, as well as pay for higher education and a range of other services for younger and middle aged people as well. In fact, projections by the Pensions Policy Institute indicate that, as a share of GDP, the cost of the current pensions system (with retirement at 65) would only rise from 5.6% in 2010 to 5.8% in 2050; while Government forecasts indicate an actual decrease of 0.1%. But of course, if fewer and fewer corporations and individuals avoid tax and Government continues to allow this, retirement costs, as well as other social benefits, will become harder to afford as although the economy might grow faster than the rate of aging, there will indeed be less public finance available. Add on top of this a Government ideologically determined to "shrink the state" and drive pensions increasingly into the arms of private finance companies, and it soon becomes obvious that the choices being foisted onto British people are not about what is affordable at all - rather, it is about priorities and the sort of society we want to see.

Why is it affordable for the state to hand out over £70 billions to just one private company to clean up its mess at Sellafield nuclear plant, or pay out £4 billions in subsidies every year to private rail companies to hand on to their shareholders in dividends, but pensions can't be afforded for ordinary people, mostly on low incomes to begin with (we are, after all, talking about state pensions, not private or occupational schemes)?

The priorities become even more troubling when you reflect that although people are living longer, not all are doing so in good health nor are they all living to the same age, and social class and income closely correlate to your chances of survival. The bottom line is that poorer people do not live as long as wealthier citizens: geographically, life expectancy at birth ranges according to one (experimental) set of ONS figures from over 93 years in wealthy Moreton Hall ward in Bury St Edmonds in West Suffolk to just 65.4 years in less well off Rooksdown ward in Basingstoke in Hampshire.

But even these are averages: there are many variations and lower paid, manual workers live shorter lives even now in the 21st century. As pointed out by another recent study of life expectancy among people who have already retired (among whom a village in Somerset comes out as the best prospect), your location itself doesn't determine your chances of survival - rather it hints at other factors, primarily your wealth and the lifestyle it affords, including access to better food, health services and environmental factors such as housing and leisure. Consequently, people in areas with lower wealth live significantly shorter lives, with healthy life expectancy in Manchester a meagre 55 years, similar to some parts of Glasgow and poor districts in other larger cities.

And so, the reality is that with our privatisation-obsessed, inequality-promoting government seducing the populace into accepting the idea of old age being supposedly unaffordable, a growing number of the poorest will not only have to wait longer to get their meagre state pension - they will need to do without it altogether.

Why? Because they will be dead.