BRITS BE WARNED! Hard Brexit means working longer and retiring later
A hard Brexit with severe cuts to immigration would force Britons into longer working lives in order to uphold a sustainable ratio of workers and pensioners, according to modelling carried out for the Guardian.
The state pension age is due to rise as a result of increased life expectancy and large numbers of baby boomers retiring. However, further delays to pension payments will be necessary if current levels of immigration, which sustain the country’s old age dependency ratio, are not maintained, the Oxford University work indicates.
Director of the Oxford Institute of Population Ageing and Chair of the UK government’s foresight review on ageing societies, Professor Sarah Harper, said: “The message from Brexit is if you don’t want immigrants, you’re going to have to work longer. That’s how the sums work”.
In the modelling, Ms Harper’s team predicted that if migration were stopped, it would have a serious impact on workers, necessitating “far longer working lives”.
Harper states, “If, because of Brexit, we limit migration, we will start ageing at the same rate as Greece, Italy and Spain”. These countries are facing serious economic and social problems linked to declining populations caused by low birth-rates - 1.3 births per woman in Greece, 1.32 in Spain and 1.37 in Italy, compared with 1.81 in the UK.
John Cridland, the former CBI director who is revising the state pension age, told a recent conference run by the International Longevity Centre UK that the affordability of the state pension into the future had been made uncertain by “the Brexit factor”.
Even without changes to immigration, the number of dependents for every working adult is starting to rise in the UK. As a result, according to a report by the Resolution Foundation thinktank, the state pension age could be forced up to 70 by the late 2030s.
“This decade marks the turning point in a transition to an ageing population in which the population of people aged 65+ is set to grow faster than that of working age,” said David Willetts, the executive chair of the Resolution Foundation.
“For individuals, in simple terms, living longer will require an overall higher level of lifetime income to maintain a certain standard of living. With the large baby boomer cohort entering retirement, the concern is that younger generations face a need to balance achieving a higher lifetime income with the requirement to direct additional resources to support an ageing population”.
Source, deVere News.