By Norma Cohen
Published: May 26 2009
A majority of Britons now favour longer working lives if it means a more generous pension in retirement, a significant shift of opinion in the few years since the subject was raised by the Pensions Commission report in 2005.
A Financial Times/Harris survey of 1,126 adults in Britain conducted in early May, found that 60 per cent of respondents would support working beyond the current state pension age in order to receive a bigger pension.
Moreover, the survey found, only 13 per cent of respondents described themselves as "strongly opposed" to such a policy, suggesting that the nation may finally be ready to debate one of its long-cherished pillars of the social safety net: retirement at age 65.
If so, it would be good news for a government whose official estimate of the amount it needs to borrow this year is £175bn and whose credit rating received a negative outlook from Standard & Poor's, a warning sign that Britain's triple A rating may be under threat.
The National Institute for Economic and Social Research recently estimated that adding five years to working lives by raising state social security ages could help the UK return to a level of debt below the "golden Rule" of 40 per cent of gross domestic product by 2023.
However, retirement ex-perts say there is much more at stake than simply restoring the nation's finances to a sound footing. Ros Altmann, a specialist in pensions economics, said Britain needed a rethink that goes well beyond the state pension.
"Pensions alone cannot solve the pensions crisis," she said. "We need to rethink retirement".
For one thing, Britain's demographics point towards the path of economic decline unless older people can be kept in the workforce because the country is not producing enough young workers to keep the nation economically productive.
Ms Altman said part of the problem was that the concept of retirement was viewed far too rigidly, with the expectation people go from full employment on a Friday and zero employment by the following Monday.
Reforms were badly needed, she said, to make it easier for older workers to slip into part-time from full-- time employment and to re-train. The best model, she said, was the flexible rules that now made it possible for mothers of young children to stay out of employment temporarily but still be reassured they could return.
"Age policy and retirement policy are stuck in the 1940s," she said.