Facing up to demographic reality is never likely to be a vote winner, but over the course of the next four decades the UK will gradually increase the state pension age to 68 for both men and women.
Governments all over the world are waking up to the necessity of such a move, driven as it is by longer life expectancy, the associated costs of ageing and a decline in the number of in-work people to support the retired.
Australia, Denmark, France, Germany, Ireland and the US are all lifting the age at which state pensions and social security are paid. It seemed as if the trend was both logical and inevitable, but opposition is being led by a new darling of the left-wing.
Young, energetic and popular, Canada's recently-elected Prime Minister, Justin Trudeau, yesterday announced plans to cancel the previous government's lifting of the retirement age, reversing a policy that would have seen it rise over time from 65 to 67. The young Liberal describes the move as part of a plan that “rejects the austerity trend”.
He does at least recognise that dealing with the challenge of a demographic shift “will require a broad strategy,” but the problem is that any such strategy will require both carrot and stick, and the Canadian can’t bring himself to pick up the stick. If he thinks people will work beyond the age of retirement due to “encouragement” from government schemes, he’s sadly deluded.
Away from left-wing politics, the issue tends to be approached with more realism. Indeed, in one US study, young adults said they believed they were more likely to see an alien spacecraft than ever to receive a social security cheque.
In Britain, the chancellor is at least thinking creatively about how to encourage a savings culture (there’s the carrot) while raising the retirement age over time. The new Lifetime ISA is an intriguing intervention, but has led to concerns that it signals the death of the traditional pension plan.
Nevertheless, it’s several steps ahead of the new Canadian Prime Minister, who seems determined to ignore demographic reality in favour of anti-austerity politics. In the words of Canada’s Conservatives, “it’s the wrong call for the economy and the wrong call for the people".