There are good reasons to let people use some of their leisure time sooner in exchange for retiring later

Whenever economists start complaining to each other about how busy and frazzled they feel, it is never long before one of them says ruefully: “Keynes thought we’d all be working 15-hour weeks by now!” 

In fact, John Maynard Keynes’ famous vision from 1930 of a more leisurely future is not as wrong as it seems. As Paul Johnson of the Institute for Fiscal Studies think-tank explained recently, we really do work far fewer hours these days. But we take most of that extra leisure time in one huge lump at the end of our lives. It is called retirement. 

Looked at this way, the system does seem a bit strange. If state support is going to allow everyone to have a period of leisure in their lives, why does it all have to be at the end? 

There are good reasons to let people use some of their leisure time sooner in exchange for retiring later. Many of us feel stretched in certain phases of our working lives.

For some, it might be when our children are small and we wish we could spend more time with them. For others it is when our elderly parents are frail and need care. Some of us wish we could retrain to do something else, if only we had the time. But most people push through, juggling work with everything else, exhausted eyes on the prize of retirement. By the time we get there, the best moment to enjoy many of those other options has passed. The kids have grown up. Returning to education might be fun, but there is less time to turn new skills into a fulfilling second career. 

Policymakers would probably flinch at the idea of making it easier for people to take time off work. They are already so worried about the fiscal consequences of longer life expectancy that they want people to work as much as possible to help fund their retirements.

But if everyone is going to need to work for longer, occasional breaks or slower stretches might help improve stamina. People who are more rested and fulfilled are more productive. And as books such as The 100 Year Life have argued, in a world of longer careers and technological disruption, it is important that people at risk of losing their jobs to automation be given time to retrain. Otherwise, they will just keep running in the same hamster wheel until it rolls off a cliff. 

Here’s how it might work. A taxi driver could take a year to retrain as a high-end chef, for example, swapping an automatable job to one less vulnerable to robots. He could take one year of state pension to do it, then simply retire one year later than he otherwise would have done. Or two parents could work four-day weeks while their children are young, receiving state pension for the fifth day. In exchange, they would delay retirement by the same number of days. 

Of course, people with higher incomes can afford to do this already. They save outside of their private pensions to fund breaks or periods of part-time work, and then make up the lost years of pension contributions later. But why should this be an option that only the affluent can afford? If working life is going to be a marathon, everyone should have the opportunity to pace themselves. 

There are reasonable objections to the idea of redistributing our leisure time, some practical and some philosophical. Such a system would probably be more expensive for the state. Some people die before they reach state pension age, so allowing everyone to take some money early increases the total cost to the public purse.

John Ralfe, a British pensions expert, also points out the income benefit for someone who tapped their pension early would probably be quite small, especially in systems like the UK’s in which an individual accumulates a state pension over time through specific contributions. 

 Even if the benefit did provide a tempting sum of money, people still might not use it because of cultural pressure or employer inflexibility. Just look at the response to the UK’s new shared parental leave policy. Fathers have been slow to take up their right to paid time off. Finally, there is the issue of moral hazard. If someone took five years of paid leave in their 40s, then became too sick to work in their early 70s, would the government really refuse to give them a pension until they reached their deferred retirement age? 

Rethinking the way people take their pension payments may not be the perfect answer. But it is the right debate at the right time. Too many people see retirement as the light at the end of a dark tunnel, which is only getting longer. If we let more light in along the way, more people might just enjoy the journey.

sarah.oconnor@ft.com

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