Thursday, March 14, 2013

United Kingdom: Lords Report Says Government Unprepared for Aging Population

A report issued by the United Kingdom's House of Lords Committee on Public Service and Demographic Change warned that the government is woefully underprepared for aging, including the need for older people to support themselves through later life, since, for many people, there is a risk that a longer life could worsen the existing problem of insufficient savings and pensions. In "Ready for Ageing?," the report addresses "later working" (one of a wide range of aging issues) and recommends:
  1. The Government and employers need to work to end 'cliff-edge' retirement, by enabling more people to work part-time and to wind down work and take up pensions flexibly. It should be beneficial to defer taking state and private pensions. Employers need to be much more positive about employing older people. The Government should publicly reject the 'lump of labour fallacy' that wrongly argues this will disadvantage the young.
  2. The Committee urges the Government, pensions industry and employers to tackle the lack of certainty in defined contribution pensions and address their serious defects to make it clearer what people can expect to get from their pension as a result of the savings they make.
In reaching these recommendations, the report notes that "working for longer would increase income from work, potentially increase savings, and reduce the time of dependence on those savings. Working for longer can often improve health and brings social and intellectual benefits." However, it understands that "making working for longer possible will require changes to attitudes, as well as policy and practice." To that end, the report includes an appendix focused on working longer, which further suggests, among other things:
  • employers need to be much more positive about employing older people. Employers and employees should adopt a more flexible conception of how and when people move on from paid work as they get older, to their mutual advantage;
  • employers should demonstrate more flexibility towards the employment of older workers, and help them to adapt, re-skill and gradually move to more suitable roles and hours when they want to do so;
  • employers should support those with responsibilities for caring for older people—particularly people in their 50s or 60s who care for elderly parents—to continue part-time or in flexible work;
  • welfare to work policies should also address the needs of older people
Source: Lords Select Committee Press Release (March 14, 2013)

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