Ever receding retirement?

This blog was contributed by Hannah Pearce, Age UK’s joint Head of Public Affairs. 

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The big headline in today’s autumn statement was the Chancellor’s announcement to increase state pension age. George Osborne said that state pension age would be set following a general principle by which people could expect to spend a third of their adult life in retirement. He declared that state pension age needs to keep up with life expectancy. On current assumptions, this would mean an increase to 68 in the mid 2030’s and 69 by the mid 2040’s. This follows a number of increases to State Pension Age in the last three Pensions Acts, the most recent of which speeded up equalisation so that women’s State Pension Age will increase to 65 between April 2016 and November 2018 and then to 66 for both men and women between December 2018 and October 2020. The current bill going through parliament proposes an increase to 67 between 2026 and 2028.

We have two broad concerns with this pronouncement. Firstly life expectancy figures on their own do not tell the whole story. Whilst life expectancy at birth (in England) for men is 83 the life expectancy gap – the gap between the highest and lowest life expectancy estimates by local authority is almost 9 years. The picture looks even worse when you examine healthy life expectancy which is only 64. And the male healthy life expectancy gap by local authority is over 15 years with Richmond at one of the scale where it is just over 70 compared to Manchester where it is just 55.

Secondly increases in state pension age must be accompanied by the certainty of a decent state pension. The Chancellor proudly claimed that the ‘triple-lock’ (a system by which the pension is uprated by whichever is higher of earnings, prices or 2.5%) ensures a ‘fair and generous increase in the state pension every year to those who’ve worked hard all their lives’ without mentioning that this guarantee currently only lasts until the end of this Parliament in May 2015.

The current Pensions Bill provides an opportunity for both the triple lock to be permanently included in legislation and for far greater detail to be included about the systematic review of state pension age. The Bill introduces 5 yearly reviews for future increases and the DWP has today published further details of how these reviews will be carried out which now need to be debated and incorporated into the Pensions bill.  These reviews will make significant decisions which affect people’s lives and financial planning and should be taken as a series of carefully informed decisions by independent experts rather than part of a political set piece announcement as we saw today.

Find out what the autumn statement means for you 

Read our full autumn statement 2013 briefing 

 

6 responses to “Ever receding retirement?

  1. What does Age UK intend to do about this? Surely a campaign against these (and the previous increase) should be launched?
    The Government have already reneged on their promise not to raise the State Pension Age i.e. no sooner than 2016 for men and 2020 for women.

    Although Age UK did campaign against the aforementioned changes they have not taken any further action since. Despite knowing the devastation and despair the changes have caused.

    http://you.38degrees.org.uk/p/statepensionlaw

  2. It paints a very grim picture for the future in 21st century Britain. From birth it will be nursery from the age of 3 or 4 and onto school and further education till the age of 21 where one will enter the world of work. By the age of 70, health will have long gone for most as well as physical capabilities and brain power. For whole swathes of the country it will be the exception for someone to ever attain pension age. For those that do mind and body will have deteriorated so much that it will be a short time before the care home beckons. At this point despite double speak, any wealth that anyone has acquired, during their life time,,super rich aside, will be grabbed by the state. Should anyone fall of the work wagon anywhere along the way, the cuts in benefits makes it a lot more likely that homelessness and a very early demise will follow. While we now look upon the days of the Dickension work houses as harsh times for the populace, we may in time look back on them as the golden age of fairness and equality as we march further into the divide of have much and want lots and lots more and those who would serves their needs and should have less, much, much less.

  3. Unfortunately, the government is not interested in the quality of our lives, only in the length of our lives and how long they are going to have to pay us to exist. They assume that we can all subsidise our pensions with private pensions, completely ignoring the fact that probably the majority of us are too concerned with how we are going to pay our bills, rents/mortgages, the cost of bringing up children, all the extra taxes over and above the income tax, national insurance etc that we pay, and how we can do all this on static incomes, part-time incomes and sometimes greatly reduced incomes, to even start to think about private pensions. They ignore the psychological effects of all these pronouncements too. I, for one, have worked my whole life, expecting to retire at 60. I was, in fact, going to work until 61 when my husband reaches 65 in 2015. We would then have retired together but not so now. I am certainly not working until 65 and three quarters, my generous discount, as my husband will then be 70 and we would like some semblance of a life doing what WE want to do before our inevitable demise. One wonders how long we in this country will carry on accepting all these dictates? ‘We are all in this together’; what do they take us for – simpletons? One can’t help but feel these days that with all the dishonesty and greed amongst politicians, bankers, and businesses, and with all the mismanagement in different sectors, that they use the rest of us to take the brunt of all their mistakes and wrongdoings. We, as usual, pay for everything.

  4. elizabeth frampton

    Was able to retire at 60, but was amazed at the news that in future many people will not be retiring until late 60s. I paid in all my Nat ins.and income tax contributions and am entitled to a fair pension, but as the average leaving salary is about £2,000 a fair pension would be around half, but we only get under £500. Not really enough to live on, i was looking forward to retirement but now am penny-pinching to make ends meet.

  5. I refuse to die of cold and hunger because of a Government, and I use that term in it’s loosest sense, that quite simply does not care about me. Fairness is something that simply does not exist in the Tory vocabulary, at least under Labour we will all be shafted equally not just those at the bottom of the food chain. As for 2030/40 I probably won’t be here so god help those of you who make it, you’ll need it!

  6. I am 56 my wife 55. We do not expect a state pension even though at this point together we have paid in more than 60 years into the state pension. That’s work years in a job. My wife pension age has risen 6 years and mine by a year, we are supposed to retire at 66. I have no faith in that. The state pension is dead and buried I just wish the politicians would give the truth for once.
    We both do not see retirement in the UK as a viable option. Not for our generation that is caught between two baby boom generations. We are of a generation that has very little or no say in anything. Not enough voting power.

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