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A Citizen’s Income would provide a pre-retirement income

Retired people receive pensions: but what about those approaching retirement age?

Increasing longevity and the increasing cost of pension provision mean that in many countries the state pension age is rising, and will no doubt continue to rise; and, at the same time, experience of retirement is becoming more diverse. If people retire early then there might be a reduced occupational or other private pension, but there will be no state pension. Many will find a part-time job with which to fill the income gap, and this can be a useful stepping stone into retirement; but some will find themselves on means-tested benefits – a system now characterised in the UK by a bit of flexibility in relation to the pre-retired, but it still assumes that men and women will continue in full-time employment until the state pension age.

A Citizen’s Income would make everything more flexible, because it would be paid during full-time employment and part-time employment, during semi-retirement, and during retirement (as a Citizen’s Pension). Other pension income would still be needed, but the whole of one’s income from the State would no longer be determined by which side of a somewhat arbitrary retirement age you happened to be.

For many people, the ideal retirement process is to move from full-time to part-time employment and then maybe to stop altogether. A Citizen’s Income would reflect and encourage this trend towards more flexible retirement because it would make the state pension age even less significant than it is now. All that would happen at the designated age would be that someone’s Citizen’s Income would rise to the level of the Citizen’s Pension: and because everyone would have a Citizen’s Income, we would see a variety of retirement patterns, the most common being a gradual retirement from paid employment.

The flexible ‘decade of retirement’, and flexible retirement, are becoming the norm, but few concrete proposals have been made to encourage the process and to enable it to serve the needs of citizens. A Citizen’s Income would fill part of the income gap, and would go further by offering people the opportunity to vary their participation in the labour market at any age. It would put an end to anomalies and, if the pre-retirement Citizen’s Income were large enough, it would minimise means-testing, tackle poverty, encourage saving for old age, help to make flexible retirement less of a dream and more of a reality, and prevent the poverty in old age that stems partly at least from the complexity and stigma of the present web of means-tested benefits.

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About the Book

101 Reasons for a Citizen’s Income offers a short, accessible introduction to the debate on a Citizen’s Income, showing how a universal, unconditional income for every citizen would solve problems facing the UK’s benefits system, tackle poverty, and improve social cohesion and economic efficiency. For anyone new to the subject, or who wants to introduce friends, colleagues or relatives to the idea, 101 Reasons for a Citizen’s Income is the book to open up debate around the topic. Drawing on arguments detailed in Money for everyone (Policy Press, 2013), it offers a convincing case for a Citizen’s Income and a much needed resource for all interested in the future of welfare in the UK.