Comment: Working hard to make a living – well into old age

How will Scotland treat the older generation when it comes to pensions, Duffy wonders. Picture: Ian Howarth.
How will Scotland treat the older generation when it comes to pensions, Duffy wonders. Picture: Ian Howarth.
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The basic state pension benefits ought be cast in iron.

Untouchable unless there has been a nuclear war. It is art and part of the social contract made between government and the people it serves.

Although not a large sum of money when paid out to individuals on a weekly basis, every little helps. But, a well-respected think tank has now crunched the ­numbers and it seems the nation can no longer afford the rising national pension bill. ­Consequently, many of you who were ­hoping for that bit extra in your retirement planning may have to think again.

The state pension age should rise to 70 by 2028. Then it should rise further to age 75 from 2035. This is according to the Centre for Social Justice (CSJ) think tank, headed up no less than a former Tory leader. Former secretary of state Iain Duncan-Smith believes the UK isn’t responding to the potential of an ageing workforce. Of course, Duncan-Smith will never need to rely on a state pension in his old age – because he will benefit from a fat government pension.

There are two issues here to be explored. One is the social contract and poor fiscal management of all the “pension contributions” paid into the system for decades by us all. The second is the notion that a 74-year-old bricklayer can still chug away in the cold wind and rain.

No, let’s add a third. What would an ­independent Scotland do?

If a UK bank, as has happened, goes belly up, then the government will step in with mega money to save it and the financial system from imploding. Tens of billions of pounds to keep a teetering financial ­system in place, while the taxpayer shoulders this and the resultant losses. But ask the same government to honour £20 ­billion a year for hard-working people who have actually paid their dues and the answer may be different.

If paying into the tax system for ­pensions, NHS and other government services means that we have no control over ring-fencing the cash, then we are effectively paying into a Ponzi scheme. Why did ­successive governments not create a wealth pot specifically for pensions and the long-term good of the country? Like all governments in the last 50 years, it is just about what is in front of their noses. No long-term planning. Just look at the state of the Navy as another example of ineptitude in forward planning. It just does not seem fair to all those people who potentially now will have the rug pulled from under them to change the pension goal posts as the match reaches 90 minutes.

Certainly, many people are living ­longer and the over-50 brigade will expand its numbers. But there is a big question that has to be considered by the report’s authors and I believe it has been missed. Do people work to live or live to work? By making an assumption that people live to work, then it is fair to infer that they want to work well into their 70s. But many of you will work to live and will want to enjoy the latter years of your life. This may involve travelling, holidays and of course grandparenting kids whose ­parents need to work. Is it fair then to base any ­pension delay on the premise that we all want to work, lay bricks, sit on an early morning train and go on risk-assessment courses when we are 74?

Scotland looks like it may be on the brink of independence in the next few years. So how will it treat the older generation when it comes to pensions? Will we have oil rigs staffed by 70-year-olds? I think the rig doctor and pharmacy may be busy.

There is a cost involved in state pension ­benefits provision. Scotland is no different from other parts of the UK in terms of an ageing population. So will the Scottish Government ride on the coat-tails of Westminster and potentially up the state pension age to 75? Or will it take a different view on how it treats its septuagenarians? The bill will not be cheap, but the goodwill may be worth the price.

Jim Duffy MBE, Create Special.