Introduction: the state and the reconstruction of retirement policy

Governments in the UK and the US have sought to reconstruct retirement. In comparative accounts of retirement, the role of the state in ‘liberal’ countries such as the UK and the US is assumed to be weak. However, governments in both countries have proactively increased the financial necessity to work beyond age 65 considerably, while dissolving the notion of fixed retirement ages. The changes have been both positive and negative – they increase the theoretical choice that individuals have over retirement timing while reducing the amount of financial security that many individuals have. If we recognise that the state necessarily plays a significant role in shaping and reshaping retirement, we are then in a better position to argue for policies that promote greater autonomy and security over retirement decisions.

On the positive side, both the UK and the US have abolished mandatory retirement in most circumstances, increasing the theoretical autonomy individuals have over retirement timing. This means that employers can no longer routinely rely on fixed retirement ages, and older people have a much stronger legal claim to continue working past 65. This occurred in 1986 in the US and 2011 in the UK; in both cases, there was resistance from employers for this significant state intervention in the labour market. Likewise, governments have intervened in the area of occupational pensions. In the US and the UK, it is now easier to take a pension with an employer you currently work for, while in the US, employers have to continue contributing to pensions beyond ‘normal’ retirement age. Furthermore, governments have reformed state pensions in both countries so that people can claim a full pension while continuing to work. Policies such as these blur the divide between work and retirement, and for some individuals, this will be a positive development. In particular, it will allow some people to gradually retire, whereby they reduce their hours in the lead-up to ‘full’ retirement; this is seen as desirable by many individuals (Abraham and Houseman, 2005; Vickerstaff, 2007).

While the aforementioned policies can be considered broadly positive, the more problematic side to this reconstruction of retirement relates to the financial pressures to work past 65.