Increasing pension age did not stop people retiring at 65

A decision to raise the pension age to 66 did not result in less people retiring, a new report has found.

The Economic and Social Research Institute (ESRI) study says many people gave up work at 65 anyway, and claimed social welfare benefits.

    Key findings

  • There is no clear evidence that the change in the pension age impacted the retirement rate of those born after the cut-off point.
  • The retirement rate among the younger group of 65-year-olds who were born in January and February 1949 was very similar to the retirement rate of the older group born in November and December 1948.

The Government had hoped the change to the retirement age would reduce the cost burden on the State.

"In the context of population ageing and the rising costs of state pensions, the age at which people retire is increasingly important for public policy. We have not found evidence of people reacting to the policy change in 2014," said Paul Redmond, Research Officer at the ESRI.

"However, the analysis highlighted the need for improved data that allows us to fully identify an individual’s precise age, social insurance contribution history and private pension income, so that the impacts of future policy changes in this area can be effectively evaluated."

    Potential reasons behind the lack of any clear policy effect

  • Some 65-year-olds who did not qualify for the transition state pension may have been receiving Jobseeker’s Benefit as a type of de facto pension payment until they reached the age of 66. This is likely to have lessened the impact of the change on those born just after the cut-off point.
  • Due to a lack of sufficiently detailed data relating to a person’s work history, it was not possible to fully isolate individuals who had sufficient social insurance contributions to satisfy the contributory pension requirements. It is possible that the policy change may have had a larger impact on the retirement rate of this group alone. However, more detailed data would be required to establish this.
  • The existence of occupational pensions could limit the impact of the policy on retirement decisions, as individuals with such incomes could still choose to retire at 65 irrespective of the policy change.


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