Pension equity is very important, especially when it comes to the national pension. Sadly, it is increasingly missing from government pension policy.
Labor Pensions Secretary Mel Stride called for state pension equity (equity between rich and poor pensioners) this week when she announced that the state pension age increase to 68 would be reviewed. Missed the opportunity to properly mention gender.
Stride announced in the House that the government’s plan to raise the state pension age to 68 by 2046 would be put on hold pending a review, but he would raise the state pension age from 66 to 67. Plans have also been confirmed (between 2026 and 2028). Move on. This, he said, is that 67 is the minimum age to claim a national pension, which will put us near the top of the European pension age table.
The story made headlines this week and was featured on numerous TV and radio shows. Some say it’s the UK’s response to the French pension riots. I think this is a bit unreasonable considering no one was threatening to riot in the UK.
It is likely a response to recent comments and data showing that life expectancy growth in the UK has stalled in recent years and has declined further since the pandemic.
In this context, the move to continue to relentlessly raise the state pension age without a proper review was both ill-advised and unfair, but Mr Stride needs to go further to restore equity. We need to look at regional and city differences in life expectancy.
The fact is that, based on my apparently superficial research, life expectancy growth in the UK has all but stopped in the last decade.
While it is true that many forecasters expect life expectancy to increase in the long term, projections are not as good as recent data, with 2021 Census and ONS data suggesting that life expectancy around the UK It gives good insight into the dreaded disparities.
For the sake of brevity, we will be looking primarily at life expectancy for men, but women may live a few years longer on average in these regions.
The unavoidable fact is that setting a fixed retirement age for all adults in the UK ignores the reality of regional differences in life expectancy that governments will sooner or later have to deal with. , men’s life expectancy already varies by region by more than a decade, with clear disparities between rich and poor regions.
According to the 2021 Census, men living in Glasgow City will only live past the age of 73 on average. birthday. Life expectancy in Blackpool means that a typical man will live past his 74th birthday. On average, the typical man living in these areas can claim a state pension for only five to six years once the minimum age is raised to 67.
By contrast, people living in wealthy Westminster (home to many MPs, of course) and wealthy Kensington & Chelsea live on average 84+ years longer than those living in Blackpool or parts of Glasgow. On average he can claim a national pension for 17 years, whether they need it or not.
Closing with Mr. Stride’s wise words.It is essential that the national pension remains sustainable and fair across generations. ”
I couldn’t agree more, but it was a shame he didn’t add “Across Regions and Cities” as well.
It’s time to talk to this elephant in Mr Stride’s room.
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Kevin O’Donnell is the editor of Financial Planning Today and has worked as a journalist and editor for over 30 years.