A house price boom in recent decades and generous retirement schemes that promise a guaranteed, inflation-linked income to retirees have prompted many financially stable over-50s to quit the workforce for good, said Tony Wilson, director of the Institute for Employment Studies.
OK. Think of our Laffer Curve, income and substitution effects. The claim is that at a certain level of decent pension then the income effect predominates. I’m making enough, so stop. OK, fair enough. Not sure it’s wholly right but willing to accept it for the moment.
Mr Wilson said many older people had stopped working because of the rising value of assets they own and “very generous” rules on accessing private pensions early have given them financial freedom.
So, umm, private pensions and guaranteed inflation-linked incomes? It’s rather more public sector which are defined benefit, isn’t it? Private are defined contribution by now?
OK, there will still be those who lucked out into defined benefit when working decades back but that’s a problem that is already solved in the private sector. No one starting work now does gain access – outside the public sector – to defined benefit pensions.
So, what should we really take from this then? Either the man doesn’t connect the dots of his own thinking or, more unlikely, he’s saying that we’ve got to go after the public sector pensions, isn’t he?