People of pension age in England are expected to live longer than ever before
A new report from Public Health England reveals that life expectancy in England has risen to its highest ever level.
Based on 2014 data, men who reach the age of 65 can now look forward to another 19 years, a rise of 0.3 years on 2013. They can expect another 12 years at 75, six years at 85, and three years at 95.
Women’s life expectancy has seen a similar rise, with those who make it to 65 expecting to live a further 21 years, 13 years at 75, seven years at 85, and three years at 95.
Although the report does identify regional differences, John Newton, chief knowledge officer at Public Health England, says that “Overall the report presents a positive picture nationally and life expectancy is the highest it’s been since we started measuring.”
Marek Góra, writing for IZA World of Labor, stresses that “pension systems need to be redesigned to accommodate demographic changes.” He believes that waiting is an expensive error: postponing adjustment simply increases the economic and social costs. The first step is individualization of participation—the interests of workers (wages) and retirees (benefits) differ. A reformed pension system should aim for an optimal combination of the contribution rate and the wage replacement rate. Governments need to be more transparent and make adjustments to reduce the burden on workers.
Investigating late-life work and well-being for IZA World of Labor, Carol Graham notes that “unemployment and fiscally unsustainable public pension schemes will be critical issues facing both advanced and emerging market economies for the foreseeable future.” Creative solutions are necessary, and “flexible retirement and work time could be part of the solution and would enhance well-being.” She acknowledges that “while the potential transaction costs of such arrangements, as well as their feasibility in more precarious labor markets, are concerns, policies that support more flexible labor market arrangements, including incentives for job-sharing and remaining in the labor force after retirement age, can help overcome these problems.”
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Redesigning pension systems, by Marek Góra
Late-life work and well-being, by Carol Graham
Pension reform and couples’ joint retirement decisions, by Laura Hospido
The incentive effects of minimum pensions, by Sergi Jiménez-Martín