Is this a bad time to grow old? On the face of it, longer life expectancy and better health care should mean an ever increasing distance from our ancestors’ shorter and more miserable lives. Yet headlines referring to unaffordable pensions and “the end of retirement”, as The Economist recently put it, suggests not an improvement but a retreat from a golden age.
Professor Pat Thane of the Centre for Contemporary British History, a specialist on the history of pensions, warns against easy assumptions. “Most people”, she says, “have never been able to save for their old age”. Recent decades may have been a golden period for a lucky, mostly male, minority. The majority, however, have not benefited.
A large elderly constituency is nothing new: even in 18th-century England, ten per cent of the population were over 60. Nor is poverty in old age a recent development: many older men and women were recipients of Poor Law relief before the pensions era.
Something else that hasn’t changed over time is the fact that elderly women are more prone to poverty. When British pensions were introduced in 1908, it was, says Professor Thane, “mainly for women”. The government recognised that, with their interrupted work patterns and role as carers, women would struggle to pay regular contributions – and they still do.
These first pensions were very low and stringently means-tested, designed for the very poor as an alternative to poor relief. The Treasury wanted to limit spending and encourage individuals to save, deterring people from becoming a burden on state expenditure. Variations on that theme have influenced state provision ever since. Governments today, alarmed by an ageing population, warn people to save for themselves rather than depend on the state for a comfortable old age.
The welfare state, influenced by the 1942 Beveridge Report (written by social reformer Sir William Beveridge), might have been expected to tackle female pensioner poverty. Beveridge, says Pat Thane, certainly had “real sympathy with women’s needs”. But national insurance, linked to work, was his guiding principle, so he “could find no way to fit into it women who did not have equivalent work histories to men”. Nor could he foresee that increasing divorce would further complicate the picture, often to women’s disadvantage.
However, Beveridge did realise that a combination of declining birth rates and increasing life expectancy could pose problems. His report proposed flexible retirement, but the Attlee government disagreed.
In early postwar decades, retirement became a common expectation for manual and other workers. Men built up better state pensions, and also benefited disproportionately as occupational pensions spread – though most remained small.
Hard as it is to imagine today, people believed that earlier retirement would become the norm. Politicians assumed that new technology would reduce working time, and fretted about the “problem of leisure”. Employers used early retirement to remove older workers from heavy industries and, as the recession took hold in the 1980s, to replace them with cheaper, younger workers in the professions and services.
But as the birth rate declined and life expectancy increased, the ratio between tax-paying workers and pensioners changed. And retirement itself lengthened. When 60 or 65 was originally set as the retirement norm, many people were physically ‘older’ at that age, having begun work earlier and worked in more strenuous jobs. Today people retire in better condition, and enjoy better health care.
The result is that the retirement age is edging upwards as the state and companies seek to reduce their commitments to paying for pensions, and individuals resist being forced to stop working by an arbitrary ‘official’ retirement age. All this echoes the world before pensions, when work had no formal end point.
Such flexibility will suit those with resources. “The rich”, says Pat Thane, “have always been able to retire when they chose”. For others, especially women, it will remain an anxious, precarious time. While overall living standards are much higher today, we could see, she adds, a return to the time when the poor were condemned to “keep on working until they drop.
Chris Bowlby is a presenter on BBC radio, specialising in history