Opinion

Why a tax cut for the elderly would help us all

UK citizens are living longer, but social and economic conditions mean they are not necessarily living better in older age. Deferring retirement may be a solution.

People in the UK now live longer than ever before and the welfare of the growing elderly population is an ever more pressing social, economic and health problem. 

There is a radical, yet simply implemented, win-win solution to keeping people of state pension age socially engaged and economically productive to address this growing problem: older people should be encouraged to remain in employment, either full-time or part-time, for longer. 

This would reduce social isolation, keep them active and integrated in society, and in turn reduce retirement-related illnesses. The NHS and social care system would also benefit from a reduction in health problems caused by the current tendency for people to socially and physically disengage once they reach their mid-sixties.

At the risk of coining a vacuous slogan, the mid-sixties are the new fifties. Life expectancy has been growing steadily for over half a century. In 1951, a man aged 65 could expect to live to the age of 77. Today, he can expect to live to 86, and by 2050 to 91. 

We are living longer – yet for millions oppressed by the escalating cost of living and depressed by problems such as loneliness, longevity is in danger of becoming something akin to a curse. 

Stress and ill health

The UK has now reached a point where there are almost as many people over state pension age as children under 16, and the proportion of the elderly only seems set to grow. Not only are there more elderly people than ever before, but the way in which we live is changing: about a third of people over 65 now live alone.

Accordingly, retirement is now ranked the 10th most stressful life event. One’s defined daily structure disappears overnight, together with working relationships – which can often be sociable – and the source of what many people feel gives them a sense of being useful and valued. 

While there may be benefits to retirement, multiple studies demonstrate a clear correlation between retirement (as opposed to mere old age) and an increased incidence of serious chronic illnesses, such as diabetes, stroke and cancer.  

A Harvard School of Public Health study of people aged 50 and over demonstrated a clear correlation between retirement and risk of stroke and heart attack – including people who were free of major cardiovascular disease up to 10 years before retirement. 

Adjusting for a wide range of factors, age, sex, socioeconomic status and behaviour, those who had retired had a 40 per cent higher chance of a heart attack or stroke than those who were working at the same age. 

According to the British Psychological Society, in a similar UK study, almost twice the number of retired individuals compared to those still employed as the same age suffered chronic conditions such as diabetes, stroke or cancer. 

Retiring also increased the risk of depression by 40 per cent and loneliness is a bigger risk to health than obesity. Arguably, isolation will only increase as society becomes more automated, removing the element of human communication in our everyday interactions. 

As just one example, supermarket counters are now being replaced at pace by self-service machines, taking away an opportunity for those who are isolated to have human contact. In some cases, a chat with the shop assistant is the only conversation that an elderly person has in a day.  

All of this comes at a time when our health and social care system is already unable to cope. The Royal College of Physicians recently said the drastic shortage of specially trained physicians to look after the rising number of elderly people and a lack of NHS workforce planning meant England was “sleepwalking into an avoidable crisis of care for older people”. 

Remaining employed

Treating the elderly as a burden and not an asset – while inadvertently keeping them ill and isolated – is unkind, unwise, impractical and a waste of a precious national resource.

Without an effective plan the situation will likely get worse; lateral thinking is urgently required. A tax incentive to keep the elderly in some form of employment would be a cost-effective and efficient way to tackle this problem – as well as filling vacancies in the workforce. 

Currently, those who work past state pension age do not pay national insurance but do pay income tax on their earnings. The earnings are calculated taking into account both pension drawings and employment income. 

Removing the obligation to pay national insurance is not enough, and a tax break alongside it would be a better incentive. As well as increasing engagement and productivity, this policy would also leave people with greater financial resources to participate in other social activities.

As well as improving the welfare of the elderly and making economic gains in the process – by reducing retirement-related illnesses, for example – we would also benefit from their accumulated life experience, knowledge and wisdom, which could be shared more easily with the younger generations than if they retired in isolation. 

Klentiana Mahmutaj is a London-based barrister and a UN independent expert on the right to development; she writes in a personal capacity.

 



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