A major crisis has approached the rich countries of the world with a decreasing population and an increasing life expectancy. Due to this imbalance, out of the 38 OECD countries, 20 countries have decided that they will increase the age of retirement in the coming years. The aim is to reduce the pressure created by the lack of workforce due to the reducing population, and the pressure faced by the economy because of giving out hefty amounts of pensions.
Many countries including France and Britain have already implemented this decision. Massive opposition can be seen in France as the government has increased the age of retirement from 62 to 64 years. French President Emmanuel Macron has said that when he had started his work as the President back in 2017, there were 10 lakh retired people in the country, who are 17 lakhs now, and by 2030, will be 30 lakh. In such a situation, there is no other option rather than increasing the age of retirement.
The reason behind the implementation of an unpopular decision is the reducing gap between the number of youth and senior citizens. In OECD in 1990, for every 4 people aged between 20 and 64, there was only 1 person aged 65 or above, which will go up to 2 in the year 2050. There has been a record increase in the time spent after retirement, as in the last 50 years, life expectancy after retirement has doubled. In these countries back in 1970, the average age of retirement was 66 years, and the life expectancy was 78 years, which means that on an average, an individual lived 12 years after retirement.
Now, they are living for 20 years after retirement on an average, with the life expectancy in these countries being 81 years on an average now. Prior to this, the age of retirement was increased by Britain, but massive opposition like France was not seen. The reason behind the same is that 60 percent of the last salary amount is given as pension to the retired people in France, while in Britain, it is only 20 percent. Till 2010, the age of receiving pension in Britain was 60 years for women and 65 years for men, which has now been increased to 66 years.
Two more increments in the age of retirement have further been proposed in Britain, and a meeting to work on this proposal will take place in the month of May. The government is hoping that it will soon be able to increase the age of receiving a pension to 68 years. And Britain is not alone in this matter. Germany too, is planning to increase the age of retirement from 65 years to 67 years by 2031.
