Businesses will be encouraged to retain older staff as the state pension age begins to rise in April, pensions minister Torsten Bell has said. He admitted ageism in the workplace and poor health services are making it harder for older people to stay in employment. Mr Bell said: "We have a challenge. We are letting down people."
But giving evidence to a House of Commons inquiry, the Minister said firms were keen to work with a Government taskforce that was encouraging them to keep older staff on. The state pension age, currently 66, is set to increase by one month in April this year and continue rising gradually until it reaches 67 in March 2028. It means 820,000 66-year-olds will lose their entitlement to the state pension, and to other benefits such as Pension Credit that are only available to pensioners.
The last pension age increase, from 65 to 66, increased the proportion of 65-year-olds in poverty from one in 10 to one in four. If this year's rise has the same impact, it would mean 115,000 additional people in their mid-sixties forced into poverty.
Mr Bell admitted that many people were worried about how they would be hit. He told the Commons Work and Pensions Committee: "I think two things are true. One is people basically do know why the state pension age is increasing in aggregate, which is that we are an older society and we are tending to live longer than we did.
"But they have been worried about how those decisions are taken, what it means for them, what it means for different people in society."
He said the Government was running a publicity campaign to ensure people affected by the change are aware of it, and to tell employers that their staff might want to stay in work for longer.
Mr Bell said employers "recognise we have a challenge" making good use of older workers but there had been an enthusiastic response to a Government scheme to help them retain older staff. The minister also said poor health services were keeping people out of work.
