"The inflexibility of the State Pension system is at odds with the Government’s wider ‘pension freedom’ agenda which allows individuals free access to private pensions from as early as age 55."
The TUC report finds that nearly half a million (436,000) workers who are within five years of state pension age have had to leave the workplace for medical reasons.
The analysis also reveals a stark North-South divide. In the South West of England, sickness and disability is cited by just 1 in 13 of those who have left work in the run-up to state pension age, followed by 1 in 11 in the South East and in the East of England.
But this rises to 1 in 7 in Yorkshire and the Humber, the North East, the North West, Wales and Scotland and 1 in 4 in Northern Ireland.
The report also reveals that those who have worked in the lowest paid jobs – including cleaners, carers, those working in the leisure industry and those doing heavy manual jobs – are twice as likely to stop working before retirement age due to sickness and disability than managers or professionals.
Workers aged over 50 now make up one in three (30%) of the workforce – up from less than one in four (24%) in 2000. The report finds that nearly half (49%) of 60 to 64 year olds stopped working before their official retirement age.
TUC General Secretary, Frances O’Grady, said: “Raising the state pension age is an easy target for chancellors of the exchequer wanting to make stealth cuts. But these figures show that we must hold off on any further rises in the pension age until we have worked out how to support the 1 in 8 workers who are too ill to work before they even get to state pension age.
“People should be able to retire in dignity with a decent pension when the time is right. Older workers have a crucial role to play in the labour market but we can’t expect the sick to wait longer to get a pension when they may need financial support more than ever.”
Aegon’s Pensions Director Steven Cameron, added: “Aegon believes that all individuals should have the choice of taking their State Pension from their early 60s, at a reduced level to make this financially neutral for Government.
“The State Pension is a crucial safety net for people in retirement, with almost half of pensioners’ income coming from state benefits. The inflexibility of the State Pension system is at odds with the Government’s wider ‘pension freedom’ agenda which allows individuals free access to private pensions from as early as age 55. As the State Pension age continues to rise, it’s important to free up State Pension access to allow individuals to fit their state as well as private pension around their personal circumstances.
“The truth is that the current landscape is a challenging one for those approaching retirement, and as such, given the choice, many people want to work for as long as possible to accumulate a decent provision. Our research showed that the proportion (34%) of 50-64 year olds expecting to retire between 66 and 69, was more than double those who expect to retire earlier, between the ages of 61-64 (13%). But as the TUC report highlights, not everyone is lucky enough to have a choice. We need a permanent solution for those who simply are unable to work into their late 60s, as opposed to idly standing by as people struggle medically and financially with later life.”
