OAP,
I think it'll be seventy five in very quick order. I spoke with someone at the Treasury - what it's gearing up for is the next public sector pension slash and burn. The lifetime ISA will herald the end of the pension, as we know it, for those about to join the workplace.
If we want to see how the Tories tacitly see retirement 'evolving', look no further than its left field mouthpiece, floating the idea a week ago. To an extent, a pragmatic reality check (after all, we know affordability is long past the point of being a contentious debating point) but the evangelical fervour with which it conceptualises the future, makes for depressing reading.
http://www.conservativehome.com/thetorydiary/2016/03/we-should-face-up-to-the-end-of-retirement.html
The entire concept of ‘a retirement’ is, after all, an artefact of the welfare system. It was clumsy of the original architects of pensions to base their end-of-life benefit on a fixed age, rather than need. That the pension age then fell so far behind life expectancy was politically inevitable, but the consequences have caught up with us. Simply put, today’s young people face the fact that they will not have a long retirement. The state cannot afford for an increasing number of physically able older people to drop out of the workforce years, or decades, before they need do so.
In the future, the idea of decades of life out of work will probably seem as unreal as the old, final-salary corporate pensions of the yesteryear do today, a few public-sector holdouts notwithstanding. As medical advances help us stay active longer, the expectation in the future must surely be that whilst you can work, you work – unless you can save enough to pay for a period of idleness yourself. We have already started in that direction: where once the retirement age was a guillotine that fell across a person’s career, it is now simply a milestone at which one unlocks an entitlement. Eventually it will not even be that.
These additional years in work, combined with measures such as the Lifetime ISA to encourage life-long saving, will afford people more time to accrue the money they need to provide for themselves in their twilight years. Meanwhile the original function of the state pension – to provide for those incapable of supporting themselves financially from the end of work until they died – could be served by some form of needs-based infirmity payment.