You do not need to be a professor of psychology to know that being forced to work later in life than you want to is depressing. But the current debate on pension reform in the UK has so far only skimmed the surface of the emotional effects of individuals affected by it.
For some women who will see their state retirement age accelerated in the coming years, an old age beset by mental health problems now beckons.
A report entitled Shattered Dreams: The Effects of Changing the Pensions System Late in the Game, written by Dutch academics, makes grim reading and should cause policymakers to think again about the psychological damage of foisting big changes on to people late in life when they have little time to do anything about them.
The findings are of particular relevance to those women who will see their state pension age increase quickly as a result of the acceleration of reforms just passed by Parliament.
The paper shows shocking increases in depression and mental illness among those who have their pensions changed close to their retirement. It reveals a 40 per cent increase in depression and mental health problems for those caught by the 2006 changes to the Dutch public sector pension system, compared to those unaffected.
Dutch public sector workers born after January 1, 1950 were told they would have to contribute more and work a further 13 months to achieve the same pension income as those born before that date.
Researchers concluded that post-retirement health worsens when individuals are induced to extend their working lives longer than they want to.
The report also found that feelings of unfair treatment was one of the key drivers. Those employees who felt they had been cheated in the final chapter of their working lives and that the retirement goalposts had been unfairly moved when they were within touching distance, were significantly more likely to suffer mental health problems.
We all know the Government has got to tighten the purse strings when it comes to the trillion pounds or more of public sector pension liabilities. And given the Dutch academics’ findings, policymakers should also factor in the feelings of resentment and pension envy of the millions retiring on poor defined contribution pensions before getting too hung up on cutting back on the more generous of the gold-plated public sector ones.
For the 333,000 women who will see their pension age move by a year or more within seven years, the sense of injustice will be palpable. Around 33,000 of them will see their pension age increase by about two years.
The Shattered Dreams report considered the effect of all workers having to work a further 13 months to achieve the same benefit. But those affected by the changes had the option of retiring but on a bit less money in an already generous scheme.
In the UK we have a jilted subset facing an increase of nearly double that and without the option of retiring on time on less money. On top of that, women are less likely to have savings from other sources or the disposable income to increase their retirement assets in such a short period of time.
It would seem likely we can expect an even greater increased rate of mental health problems among our soon-to-be-retired women. I wonder if that has been factored into the overall cost. Campaigners should keep up the pressure.
John Greenwood is editor of Corporate Adviser