Government to scrap 'anti age discrimination' rule - yeah right!

The news this morning was talking about the announcement that the State Pension Age default retirement age has been scrapped and that employers will no longer be able to force staff to retire at 65.

I read with a smile too (or should I say smirk) that the Lib Dem minister Ed Davey is expected to talk about how ‘older workers have a lot to offer in the workplace and we need to get rid of this outdated form of age discrimination.’

What a load of tosh (not the older workers having something valuable to offer may I add). There’s only one reason why this ‘outdated form of age discrimination’ term is being used and that’s the government can’t afford to pay the state pension from age 65.

This is for the following reasons –

• We are all living longer. In fact it’s estimated that half of 30 year olds today will live to age 100. It’s simply not affordable for a government to pay a state pension for 35 years when they may have not collected contributions for that long whilst you were working.  When the state pension was created the average age of death for a man was 67 so taking money for 40 years (yes you could have a career for 40 years in those days) and paying out for 2 was not a bad return!
• The baby boomers are retiring. The baby boomers are now starting to collect their pensions. The problem is that they didn’t have as many children as their parents leaving less people to contribute to the state pension system and more taking it out the other end.  In 1941 there were 5.6 workers for each pensioner, in 2000 there were 4 workers per pensioner and estimates suggest that will be down to 2.6 in 2040
• Final salary pension schemes are in decline. Employers are switching from final salary pension schemes where the average contributions were around 20% to money purchase pensions where the average contribution is around 10%.
• From 1999 to 2009 pension funds struggled. We had 3 major market corrections in those years which left average returns from equity funds lower than those from cash and bonds.

Now I’m not blaming any particular government. After all, this is a demographic problem not a political one. What makes me smirk though is how the politicians are selling us this! I can’t help seeing Jim Royal watching the same program this morning and saying “ getting rid of age discrimination my a**e!!”

Final thought...it may be OK here to talk about the problems as its someone else’s fault. However, now you know the truth if you don’t make your own plans to fund your own retirement it’s not someone else’s fault anymore is it?

 For those of you that are concerned about funding for your own retirement and want to find out ‘how much is enough’ you can contact me at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and we can go through our retirement analysis program with you. That way at least you’ll know what your future looks like and when YOU can afford to retire. Oh, and we won’t use political speak either – you’ll get the truth!