The state-pension age is no longer set in stone at 65 (or lower). Already 66 in America, it will rise to 67 by 2027. By the end of the 2020s it will also reach 67 in Britain and Germany.
But the age at which workers can get full pension benefits and the age at which they retire are not necessarily the same. The effective retirement age is often much younger than the official one. Some older workers are unemployed; others receive disability benefits, private pensions or reduced state pensions under early retirement schemes, according to “the Economist”. Though some money can be saved by raising the pensionable age, public finances will benefit much more if older people stay in work longer, boosting GDP and taxes. Improving health and promoting more flexible ways to work can help make this happen.
Current employment rates among those in their late 60s are typically very low, at 20% on average among the 34 members of the OECD. In many countries simply ensuring that people work until 65 will be an achievement in itself. Although the employment rate of 55-64-year-olds has generally risen in the past decade (Greece and Portugal are exceptions), the rate for 60-64-year-olds still averages just 43%. Some of the lowest employment rates for people in their early 60s are in the euro area, not just among southern members, such as Greece and Italy, but also in northern countries such as Belgium and France.