Increasing pension age will also increase house prices
Labour’s general election candidate for Cork South Central, Ciara Kennedy, has warned that plans to increase the State pension age to 67 next year will also drive up house prices.
“There are many risks in an increased pension age, and one that hasn’t been discussed much is the threat that it would pose to the affordability of housing for younger workers,’ said Ms Kennedy.
“Not long ago, 20-year mortgages were the norm, now you’re more likely to be paying off your bank for 35 years. This shows that the banks have an appetite for longer mortgage terms, which allow them to profit from greater amounts of interest on increasingly large loan sums.
“If we force people to stay in work for longer, it will encourage banks to extend these mortgage periods even further––it’s not hard to imagine that first-time buyers would find themselves locked into 50-year mortgages in the future. Meanwhile, the market will respond to this increased credit availability with ever-increasing house prices. The result will be less affordability, not more.
“The increase has been planned since 2010, when the then-Government of Fianna Fáil and the Green Party presented a framework of pension age increases every seven years. Unless the plan is scrapped, which neither Fine Gael nor Fianna Fáil support doing, the pension age will increase to 67 next year and 68 in 2028.
“Increasing the pension age will hurt every part of society. Older people will be forced to either stay working for longer or to sign on for unemployment benefit at a time when they could have reasonably expected to be retired. Younger workers will find it increasingly hard to start or progress their careers as vacancies due to retirement dry up, while their hopes of being able to afford their own home become increasingly remote.
“Adapting our society and economy to increasing life expectancy deserves proper care, attention, and planning––not reckless measures that put people’s most basic aspirations at risk.”