Will increasing the state pension age really save the state much money?

[ElderAve]

Most pension funds seem to be increasing their retirement age to 67 too, so even if people make other arrangements within a decade or so, 67 (or higher) will be seen to be normal retirement.

Realistically, how many people could still be doing their jobs?

I'm thinking particularly of people who've done fairly low paid work and won't have had the opportunity to save in the same way that executive types will.

I work for an organisation that has historically had very low staff turnover and very low staff absence. We've now reached a stage where a high % of staff are in their late 50s/early 60s and I have half a dozen off on long term sick leave, with no realistic prospect of return. Things like COPD, severe pain awaiting hip replacement, the stress of caring for dying parents or a very sick partner and one case just appears to be general frailness, no diagnosis. Obviously these things can happen at any time, but they're more likely at this kind of age.

The company has a generous sickpay policy but can't pay them or keep their jobs open indefinitely so we're starting to look at dismissal on the grounds of ill health capability. TBH, it probably should have been done sooner, but we've tried to be decent about it.

So, whilst these people won't be claiming pension benefits, they will be claiming sickness/out of work benefits.

Even without health issues, there must be loads of jobs you simply can't be doing at 67, hod carrying etc etc. And if you lose your job for whatever reason in your 60s, what are the chances of getting another?

So, aren't we just moving people who've worked all their lives away from a pension and onto other benefits?

Yes that sums it up in a nutshell. But I guess that benefits (in whatever form) will be less than and harder to access than an automatic state pension or a private pension scheme.
Cynically, I can’t help but feel it’s a move designed to see the elder generation die earlier so the social care budget can either match demand or even be reduced. Yes it will impact on the latest financially perilous more than the richer echelons of society.

The later you retire, the earlier you die ☹️.
So increasing the pension age is a win for the government at both ends, and also may reduce the social care bill for the very elderly (as there’ll be fewer of them!).

It does, however, depend what people do with their earlier retirement. People who use the extra time to do more exercise and cook better food see the benefit, but there’s no benefit to retiring early and then becoming sedentary, or living in poverty.
There’s been several studies of this in the past few years, although most of them count early retirement as 60-63years old, and normal retirement as 65yrs. I haven’t seen anything looking at later retirement of 67yrs or more.

Some companies have a sick-pay limit of 3 or 6 months. In some cases you can then retire on a disability pension or early retirement.

I don't think it's normal to have unlimited sick pay. Is that what you offer?

fluffysocksgoodbookwine. Totally agree!

No, PigletJohn, it's six months plus six month's half pay but if you dismiss for ill health you have to pay the notice period at full pay.

Ill health retirement means jumping through a lot of hoops (probably should) but it only helps if you have long service and are in the pension scheme.

The thing is, 'retirement' was never meant to last very long and with an expected percentage to die before ever retiring. The paradigm of 'I worked hard, therefore I deserve a reward of 20+ years being economically inactive' has never been a sustainable paradigm. MOST people in the world 'work hard' all their lives and then die. It's an inconvenient truth, but that's mostly the way of things.

The simple answer is in theory everyone can work until 67.
Practicality age related ailments will catch up. Some jobs are physically and mentally demanding or are fast paced (- think of mobile phones, where they were 15 years ago...) So it may be more challenging for older people to keep up. Than there is age discrimination in the job market. Something that is hard to proof.
So yes, a lot of people will end up in unemployment benefits without real prospects of ever finding work again.