Pension Reform and the Finance Bill 2025

Lessons from Mauritius and the UK

The cherished notion of a comfortable retirement at 60 is rapidly fading into memory, a casualty of shifting demographics and fiscal realities across the globe. Recent pension reforms in both Mauritius and the United Kingdom serve as stark reminders of this new reality, highlighting similar pressures despite their differing economic scales and specific social safety nets. While Mauritius is firmly moving to set 65 as the new standard retirement age, the UK is bracing for yet another review that could see its already rising pension age climb even higher.

In Mauritius, the Finance Bill 2025 will officially implement a pivotal policy shift. The explicit abolition of references to “60 years” and their replacement with “pension age” (now set at 65) in the National Pensions Act and National Savings Fund Act is a legislative declaration of intent. This isn’t a gradual adjustment but a clear redefinition of the retirement landscape. The government’s decision, confirmed in the Budget 2025, underscores a pragmatic response to an ageing population and the fiscal unsustainability of maintaining an earlier retirement age in a system where the burden falls heavily on the working generation. While it ensures long-term sustainability, this move will undoubtedly necessitate a significant adjustment for many Mauritians who had planned their lives around a 60-year retirement.

The United Kingdom faces a strikingly similar, if more politically fraught, predicament. Last Monday, Labour Minister Liz Kendall announced a new pension commission and a review of the state pension age, a move that, as reported by The Independent, last Monday, highlights the potential for a “tsunami of pensioner poverty” if major reforms are not enacted. With the state pension age already set to rise to 67 by 2028 and 68 by 2046, the prospect of it climbing to 69 or even 70, as seen in Denmark, is now a tangible threat.

Both countries are grappling with the fundamental demographic challenge: people are living longer, and fertility rates are declining. In Mauritius, the ratio of workers to pensioners has sharply fallen, projecting a much heavier burden on a shrinking workforce. Similarly, in the UK, the number of pensioners is expected to increase by over 50% by the 2070s, while the working-age population will grow by a mere 10%. This demographic imbalance inherently strains pay-as-you-go pension systems, demanding adjustments to ensure intergenerational equity and fiscal solvency.

However, the approaches, while driven by common underlying issues, reveal nuanced differences. Mauritius’s reform seems more direct and legislatively embedded, moving the goalposts explicitly to 65. The immediate concern appears to be fiscal sustainability, stemming from a non-contributory Basic Retirement Pension (BRP) system that has become increasingly expensive. To mitigate the immediate impact on those reaching 60, the Mauritian government has introduced an income support scheme, providing a transitional buffer for a limited period. This suggests an awareness of the social repercussions, even as the core reform is pushed through.

In the UK, the discussion is broader and touches upon a more complex tapestry of pension provisions, including the state pension, private pensions, and auto-enrolment. While both governments acknowledge the long-term fiscal sustainability argument, the UK’s dilemma is intensified by the political sensitivity of the triple lock and the cost of living crisis, which makes saving for retirement an immediate impossibility for many. The public backlash against potential pension age hikes, particularly for manual workers, underscores the social contract element of retirement provisions. Mauritius, too, will need to carefully manage public opinion regarding its shift, particularly as its BRP system is largely non-contributory.

In essence, both Mauritius and the UK are confronting the inescapable reality that retirement systems designed for past demographics are no longer viable. The moves to raise the retirement age are necessary adaptations to a changed world. While Mauritius has taken a firm legislative step, the UK’s ongoing review highlights the complexity of achieving broad consensus on a multi-faceted crisis. The success of these reforms, beyond fiscal balancing, will ultimately be judged on their ability to ensure dignity and security in retirement for future generations, while acknowledging the immediate pressures faced by today’s workers.

It’s worth reiterating our earlier point: there is no doubt that our pension system needs rationalization to ensure its long-term sustainability. However, the government should simultaneously explore avenues to strengthen public finances. Identifying the necessary funds to achieve this objective is key. For instance, rationalizing contracts with Independent Power Producers and recalling the Mauritius Investment Corporation (MIC) loans extended to “distressed corporates” and cronies of the previous administration could significantly help balance the public books. Just as a wealth tax was proposed in the UK as an alternative to pension cuts, Mauritius must also explore a broader range of revenue-generating measures or other forms of expenditure rationalization. This is imperative before resorting to changes that disproportionately affect the most vulnerable segments of its population.

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Frantz Fanon: A Guiding Light

Today, July 25, 2025, marks a significant moment as we reflect on the enduring legacy of Frantz Fanon, born 100 years ago on July 20, 1925, in Martinique. A trained psychiatrist and a pivotal figure in Algeria’s fight for independence, Fanon was more than just a thinker. He was a brilliant analyst of colonialism, dissecting its psychological and political damage in ways that remain deeply relevant to independent nations today, including Mauritius.

Fanon’s genius lay in connecting the personal struggles of individuals with the broader oppression of colonialism. In his groundbreaking work, ‘Black Skin, White Masks’, he vividly described the profound sense of alienation experienced by the colonized. He showed how the colonizer’s constant judgment, when absorbed by the oppressed, twisted their self-image. This created a relentless battle for recognition within a system designed to deny their very humanity. He called this the “epidermalization” of inferiority – where one’s skin colour dictated one’s worth. This concept resonates strongly in places like Mauritius, where historical hierarchies can still subtly influence social dynamics and how people see themselves. The ongoing search for an authentic identity, free from colonial influence, is a journey many people across the world are still on.

His later work, ‘The Wretched of the Earth’, delivered a more revolutionary, and for some, controversial message. Witnessing the brutal realities of colonial violence, Fanon argued that true liberation wasn’t just about political independence. It required a deep psychological change, sometimes achieved through the “cleansing force” of counter-violence. For him, this was a way for the colonized to reclaim their power and dignity after systematic dehumanization. While debates about the ethics of violence continue, Fanon’s argument forces us to confront the inherent violence of colonialism itself and the extreme measures often needed for genuine freedom. For Mauritius, a nation that gained independence largely through negotiation rather than armed struggle, Fanon’s ideas prompt us to consider the deeper, less visible battles for mental decolonization that persist long after the colonial flag is lowered.

Beyond the immediate fight for freedom, Fanon was remarkably insightful about the challenges newly independent nations would face. He warned against a superficial sense of national identity that could easily lead to neo-colonialism. This is where local elites simply replace foreign oppressors, keeping the same exploitative systems in place under a new guise. This sharp critique strongly echoes across Africa and in Mauritius, where discussions about economic independence, fair distribution of resources, and truly inclusive governance are ongoing. Fanon suggests that the struggle isn’t just against an external oppressor, but also against the internalized colonial mindset and the perpetuation of unfair systems by new leaders.

For Mauritius, an island nation built on successive waves of colonialism, slavery, and indentured labour, Fanon’s intellectual legacy provides invaluable tools for self-reflection. His emphasis on breaking free not just politically but also psychologically and culturally offers a lens through which to examine our educational systems, social divisions, and our relationships with global powers. Are we truly liberated if our cultural aspirations are still tied to former colonial powers? Are we truly equal if historical divides continue to subtly shape opportunities?

Mauritius Times ePaper Friday 25 July 2025