By JENNIE HAWTHORNE
IN the past 80 years the number of people over 65 mars of age has increased fourfold, and the rise has been particularly rapid in the last 20 years: 1871-1,334,000; 19313,417,000; 1951-4,100,000.
If death rates and working
habits remain constant, the present number of State retirement pensioners will rise to 7,000.000 in 25 years time; if death rates continue to improve as at present, the number will be 8,000,000. This figure is based on the number of people now alive who will come within the over-60 group by 1980.
The young wage-earner, the mother pushing her pram contentedly down the High Street, the father trying to educate a family, may find these figures of little interest. They have many more urgent personal problems with which to deal—girl friends and National Service, feeding and teething, and current fuel, food and school bills. They are anxious that old people should have a fair deal, for the difficulties of living on a small pension can be readily understood.
Naturally they will be pleased to see retirement pensions raised from 32s. 6d. to £2 a week for a single person after April 25. hut pension benefits do not concern them deeply at the moment. They are not in their 60s yet, and 1980 is a long way off.
They will all have a rude awakening later in the year. The economic significance of the growing numbers of old people and the general ageing nf the population will soon be appreciated by every worker in this country, for the lesson will be brought home very forcibly in the place where it hurts the most—the wage packet.
New rates of weekly contributions under the National Insurance Act, 1954, come into force in June. Under 185 will pay an additioial Is. a week (6d. employer, 6d. employee); over 18s will pay an extra 25.
This is but the beginning. Future rates may rise still higher.
Up and up
THERE have already been outcries and protests against these new contribution levies.
Whilst the number of pensioners grows without any increase in the working population (and this will be the case in England for the next 30 years) the amount that will have to be paid out from the national exchequer and ultimately by the taxpayer must increase.
Perhaps an argument could thus be made for the immigration of coloured workers (with the emphasis on workers), but certainly the cost of retirement pensions in 30 years' time will be three times as high as it is today.
The babies now in prams are going to be involved in heavy financial burdens if we do not develop today a realistic attitude to the fact that as a nation we are growing older.
This attitude must be governed by economic as well as social considerations. A greater number of pensioners to a constant or lower number of workers means more consumers and a trend towards higher prices. If production per worker does not increase to bear the burden of dependants at both the family allowance and retirement ends, then longer hours may follow.
Alternatively, wives and young mothers will have a greater inducement to go out to work.
This can already be clearly seen by comparing the nutither of women at work in 1939 with the number in recent years: 19395,094.000; 1950-7,236,000; 19517,392,000; 1952-7,430.000; 19537,490.000: 1954-7,610,000.
Workers everywhere who, in theory, welcome higher retirement pensions can undermine the money value of fixed incomes. They may demand higher wage rates to meet rising costs. These wage clams, once conceded, will further increase costs and the prices of finished products, ultimately lowering the value of pensions, so that the old people will be in fact no better off.
HOW are we to avoid this vicious economic circle? What methods can we employ to ensure a fair standard of living for an increasing number of pensioners without penalising dependants at the other end of the age scale?
We can try to reduce national expenditure, or raise national income.
The only reduction of national expenditure that seems likely is, strangely enough, in Defence costs. Perhaps in time a few bombs discreetly hidden in leaden bunkers and the crew to drop them will be all that we need in the way of defence.
For the moment no other reductions can he envisaged. How can national income be raised?
Productivity per head has increased since the war, and it is possible that with new techniques, a betterment of industrial relations and a higher degree of conscientiousness on the part of employer and employee, we shall be able to raise productivity to such an extent that living standards of both workers and dependants will not only be maintained hut improved.
This assumes full employment and a high rate of capital investment, plus saving to prevent inflation.
But there is a further way in which our national income could be increased, and that by the older people themselves.
FrIFLERE is a definite induce-1ment, caosed by our present system of pension benefits. for men to retire at 65 and women at 60. In many professions there is more than an inducement. Retirement at these ages is compulsory.
National retirement pensions are payable at those ages only on condition that the pensioner does not work and earn more than £2 a week. Over that amount a deduction is made off pension for every Is. earned.
There are many people who look forward to a rest from their labours in the 60s, but there are others who feel happier when they are working, It is both stupid and unjust to penalise working pensioners when we need their efforts so much.
This ruling is particularly hard on the single people—the widows and widowers—for although they may in many cases be eligible for National Assistance, they will lose part or all of their pension if they try to do a full week's work. To a man normally earning £10 a week and more, this loss is of little consequence; to a widowed office cleaner, or a man on a small wage, it is very important and a strong psychological deterrent against doing even part-time work, particularly when a long insurance contriburion record is held.
It is worth noting that of the pensioners who do continue working an estimated number of 80 per cent. have no incomes other than their pensions. This reduction of benefit does seem to hit the poorest section of the community.
It would seem more logical to offer a bonus to people who can and do work when they are legally entitled to retirement pensions.
ON an individual basis, we can have more private saving, although the trend to hire purchase commitments is against this.
We can also have more provision made for old age during working years, and this is being done in mans cases by superannuation schemes organised by individual and public concerns.
In a report prepared for the Institute and Faculty of Actuaries it was estimated that the number of employees covered by pensions schemes apart from National Insurance had reached in 1951 a total of 6,300,000 (quoted by Mr. F. Bacon, M.A., F.I.A., in an address at the autumn conference of the Association of Superannuation and Pension Funds, 18.11.54). This figure has since increased by 20 per cent. and is a very encouraging factor in our economic life. We might have, too, a more realistic Income Tax Dependent Relative scale. At the moment, there is but a paltry concession for a dependent relative with £2 to £3 a week.
Children should be encouraged to help their parents, and there is no real reason why a s9n or daughter contributing a week to a pensioner parent in the £3-aweek income range should not he entitled to full income tax relief, especially when it is remembered that National Assistance benefits are not subject to income tax.
It is often made easier today for a relative to draw National Assistance than to be supported in part at least by his or her own children.