Belfast Telegraph

Wednesday 16 April 2014

Pension age: Thousands in Northern Ireland will have to 'toil until they drop'

Pension age rise is a blow for workers

The UK pension system faces radical change

Hundreds of thousands of people in Northern Ireland could be forced to "work until they die" under a radical overhaul of the pension system, it has been claimed.

Young adults currently in their 20s – some of the biggest losers in last week's Autumn Statement from Westminster – could be forced to work until their 70s.

The move, which affects some 720,000 people in Northern Ireland, was one of the measures announced by Chancellor George Osborne in his budget review.

It means that those born after 1990 will have to work five years longer than at present before they can claim a State pension.

On the upside, the pension will go up by £2.95 per week from April, and a new transferable married couples tax allowance of £1,000 is expected to benefit 130,000 couples in Northern Ireland.

The suspension of a planned 20p rise in fuel duty will ease the burden on motorists, although we still have the highest pump prices in the UK.

Northern Ireland will also get an extra £136m from the Treasury over the next two years.

And the abolition of employers' national insurance contributions for the under-21s has been tipped to boost the prospect of jobless young people in the province, and make them cheaper recruits for firms.

The extra charge for paying for your road tax for six months at a time will be reduced from 10% to 5%. And tax discs will no longer be displayed on windscreens when a new electronic system for vehicle taxation is ushered in.

But in the most radical overhaul of the pension system in a century, the age at which a person can begin to claim their State pension is to be linked directly to life expectancy.

The change will affect anyone currently in their 40s or younger, as the State pension age will rise as the average person lives longer.

Experts predict a baby girl born today, who has a one-in-2.5 chance of living until 100, may not get her pension until the age of 77.

The proposal has sparked outrage among critics and the younger generation, and many fear that those with physically demanding jobs – such as labourers, cleaners and factory workers – will be expected to work until they drop.

Paul MacFlynn, from the Nevin Economic Research Institute (NERI), said people will be expected to continue doing exhausting work for longer when they thought they would be putting their feet up.

"Not all jobs are the same and it isn't a sustainable proposition to make those in physically demanding roles, such as construction workers, doctors and nurses, continue to work into their 70s," he said.

"People are going to feel like they have to work until they die."

Secretary of State Theresa Villiers admitted that growth in Northern Ireland was not as strong as Britain, but said it would benefit from the extra £136m.

"The Government continues to recognise the importance of support for Northern Ireland, and the special circumstances which prevail, which justify spending higher than the UK average," she said.

CBI Northern Ireland director Nigel Smyth said: "We hope the Executive will use these resources to reduce energy bills for business and domestic consumers, and increase investment in our infrastructure, particularly in 2015/16."

BACKGROUND

At present, a man can claim his state pension from the age of 65 and a woman at 61 and nine months. By 2018 it will be 65 for women and men, and will continue increasing for both to 66 in 2020, 67 by 2028 and will keep rising. Under current estimates of life expectancy, it will rise to 68 in the mid-2030s from its predicted date of 2046, rising to 69 by the late 2040s.