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Early Retirement

Volume 21: debated on Tuesday 6 April 1982

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3.

asked the Secretary of State for Social Services what is the total number of persons at work who are eligible for early retirement schemes; and if he will make a statement.

In 1979, the latest date for which information is available, at least 5·6 million members of occupational pension schemes—almost half the total membership—were in schemes with provision for early retirement on grounds other than ill health. Furthermore, my right hon. Friend the Secretary of State for Employment advises me that there will be just over 500,000 persons eligible to apply for the job release scheme by mid-1982.

Does the Minister agree that it would be a good idea if the upper limit in early retirement schemes for men were reduced from 65 to 60, which would put them on a par with women workers and release more jobs for boys and girls leaving school and for middle-aged people who have been made redundant and cannot get back into work?

Will he take account of the fact that many years ago the miners introduced a scheme, which was criticised at the time, to bring the retirement age down to 60 on a voluntary basis? The scheme was so good that more than 90 per cent. of the miners took it up, and the scheme has worked so admirably——

The miners' scheme is an occupational pension scheme. These are, of course, private arrangements between employers and employees in respect of terms and conditions of service. Many private occupational schemes make provision for an earlier retirement age. With regard to the State pension scheme, the Government's position remains as stated in our White Paper "Growing Older". In the longer term, we are looking towards greater flexibility in the retirement age between the ages of 60 and 70, together with progress towards a common pension age for men and women. The precise arrangements will depend upon the resources available when it is decided to introduce the changes.

Does my hon. Friend agree that a blanket reduction in the retirement age will not solve the problems of unemployment or of those nearing retirement? Does he further agree that what we need, as he has just announced, is maximum flexibility to suit the needs and conditions of individuals?

I am grateful to my hon. Friend. As usual, he has hit the nail right on the head.

Does the Minister accept that some of the 5·6 million people are in compulsory early retirement schemes? Since the passing of the Social Security (No. 2) Act, what action have the Government taken to inform people who will be compulsorily retired early, often against their wishes, that in many cases they will be ineligible for unemployment benefit although they genuinely seek to continue in employment?

I do not think that the hon. Gentleman is quite right with regard to private occupational schemes. Most of those schemes provide for early retirement by agreement between employer and employee. With regard to the State scheme, certainly in the Civil Service the usual retirement age is 60. It has been extended to 65 as a matter of practice in the past. Now, due to the present conditions, recruitment and so on, the age is being lowered to 60 for those in the higher income group, but for clerical officers, for example, the retirement age will remain as of grace at 65.

I do not disagree with what has been said by my hon. Friend the Minister or by my hon. Friend the Member for Somerset, North (Mr. Dean). However, does my hon. Friend agree that people regard the option of early retirement—albeit with flexibility—as sensible in the medium term in an increasingly technological age? Therefore, could greater priority be given by the Department to the earlier provision of this opportunity?

I agree that the majority of people want freedom of choice and flexibility in their retirement arrangements, and we wish to work towards that. Nevertheless, it will cost a great deal of money, certainly in public sector pensions. The resources for a very ambitious scheme are not available and are unlikely to be available for some time.