Is it time to retire “retiral”?

The recent publication of two interesting reports should at the very least stimulate debate amongst our law makers.  More than that however individual citizens should read these reports and think about the consequences for them and their families. The first report was by Price Waterhouse Cooper and it tracks life expectancy and projected pension ages.  People born in 1964 can expect to collect their state pension at 68 and to live to 88.  But people born this year may not be able to collect a state pension till age 77 although they will still enjoy twenty years of “retiral” with an expected age at death of 97.  And the report predicts an inexorable rise in both pension ages and life expectancy into the future.  Clearly “three score years and ten” is a somewhat outdated concept. Just days after this report The International Longevity Centre published “Retirement in Flux” described as a “think piece”.  This is indeed a thought provoking document, which tracks the history of “retiral” from work with the expectation of a period of life thereafter funded by a pension.  This is actually a relatively recent development in our social history.  But the report argues that the concept of “retiral” as we now understand it is perhaps already obsolete due to the increased financial demands on state and citizens’ resources caused by increased longevity.  The institution suggests a fixed retiral date should go and the concept of gradual retiral should take its place – with the state and employers changing the current practice to make that possible.  But at the same time the report argues that older people should expect and be expected to contribute by staying in the labour market longer and being prepared to contribute from their own property wealth to paying for care costs for example. David Borrowman, Senior Partner of Caesar and Howie comments “These reports are valuable in my view – even if they are a bit scary in some ways.  But really there is one simple message – families must plan ahead for the future – and you can’t plan early enough whether it be ensuring adequate pension provision or anything else.  Just on one issue we find for example that steps can be taken to mitigate payment of care costs – including protecting houses from being sold – but they must be taken early.  Too many house owners don’t think about care costs at all and how they might impact in the future on the house they own perhaps with their partner.  I just wish people would think about this in their middle age and come and see what simple planning can be done.  Waiting till someone has to go into care is too late”.