Were the French mis-sold retirement?

It was the great promise of my youth, that if I worked and saved, it could all be over by 60 with the rest of my life to play. Childish maybe – but we were told that technology would set us free and we comforted ourselves that the protestant work ethic would work.

I got half way there and then the Pension Commission reminded me that I would either have to work longer, saver harder or accept that my later years weren’t going to be quite the playground I had accepted. I think we got that message collectively – we are – as Bonaparte called us , a nation of shop-keepers. We bought the Thatcherite model and stopped dreaming.

Not so in France, where the dream of a retirement that starts at 60 is still alive – though it is- according to President Macron, the impossible dream.

Today, France will be woken up to the need to work longer as Macron announces that to qualify for a full state pension you will have to work not to  62  but to  64 or 65. The argument against this comes not just from the left but vociferously from the far right, Marie Le Pen called it ““terribly unjust and ineffective”, especially for blue-collar workers who start working at a young age.

Ooh la la

France is not alone in the percentage of GDP it spends on its pensioners, nor is its pension system insolvent, it actually spent lest than it reserved for this year. But the long-term prospects for supporting the state pension look grim, deficits are forecast in the coming decade and beyond as the number of workers per retiree falls from 2.1 in 2000 to 1.7 in 2020 and a projected 1.2 by 2070.

And , as in England, France is struggling to keep people in their fifties “productive”. Perhaps this will emerge as the toxic financial legacy of the pandemic throughout Europe  but the problem seems particularly acute in France, only half of workers are still working when they reach 62.

All of which will resonate in Whitehall, especially in the the DWP who are currently reviewing the state pension age and considering back to work schemes (aka the midlife MOT) for laggards who still live the dream they were sold in their youth.

Were the French mis-sold retirement?

The optimism of the 1950s and 1960s when social security systems emerged across Europe was based on demographic forecasts that assumed much higher rates of birth than have subsequently happened. We are not replenishing the stock of workers who are retiring and Macron sees France’s long-term financial future deteriorating unless something is done about things now, but who is breaking promises?

The fertility rates that have fallen have been amongst the new upwardly mobile classes of which Macron is a prime example, these are people who have both the willingness , the energy and the good health to work through their sixties.

Faced with this uncomfortable information, the conspiracy theory is that Macron – who stood out against pension reform in 2017, is being “encouraged” by Brussels.  He is unlikely to get his reforms through the French legislature with its consent , meaning he will have to resort to a Presidential Decree which carries with it the risk of a vote of no confidence in the President.

If the French people decide that Macron is wrong, that the system is affordable (as it appears to be today, then we may see that rarest of things, a political leader having to step down on principle.

It was not Macron who made the promise, it was a promise made by the French people to themselves. As with all pension promises, the outcome must be conditional on assumptions working out. This is the harsh lesson we seem to have learned in the UK , but which the French are struggling with. If I was a lorry driver in France with six kids, I’d be angry, but I’d be exceptional.

If Macron is to get this bold policy through, he will have to make exceptions for those most impacted and there appear to be a number of sweeteners – including to older people with physically demanding jobs. But there’s no doubt that considerable unrest is on its way. The French feel cheated, they feel miss-sold and with the reforms due to arrive this summer, it looks as if the next few months are going to be confrontational.

An interesting back-drop to the delivery of Lucy Neville-Rolfe’s recommendations over the UK state pension age. But in the UK – we don’t miss-sell retirement – do we?


About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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1 Response to Were the French mis-sold retirement?

  1. Allan Martin says:

    Two sentences jumped out the page – “As with all pension promises, the outcome must be conditional on assumptions working out. This is the harsh lesson we seem to have learned in the UK , but which the French are struggling with.” Casting stones?

    £2,100bn of future index linked DB benefits for our vital public sector workers depend on GDP growth of CPI+3.5% to CPI+2.4%pa. This hasn’t been achieved since the financial crisis and future tax payers will pick up the unsustainability tab. (Arithmetically Ponzi.) This is a harsh lesson still to be appreciated in the UK – an equivalent private sector deficit reduction contribution might start at 2p on the basic rate of income tax, rising to 5p for C19 and a one year recession.

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