Nigel Mills (Amber Valley) (Con) I beg to move, That this House has
considered the matter of raising the State Pension age to 68. I
thank the Backbench Business Committee for providing the time for
this debate, and Members for staying here on what I know is a
tricky day for travelling. Some people may have somewhere more
exciting to get to later in the evening, and I suspect we will not
be able to drag this out until 7 o’clock, but you never know. There
is plenty to...Request free trial
(Amber Valley) (Con)
I beg to move,
That this House has considered the matter of raising the State
Pension age to 68.
I thank the Backbench Business Committee for providing the time
for this debate, and Members for staying here on what I know is a
tricky day for travelling. Some people may have somewhere more
exciting to get to later in the evening, and I suspect we will
not be able to drag this out until 7 o’clock, but you never know.
There is plenty to talk about on pensions, and we can but
try.
I wanted to hold this debate because the Government have recently
received the periodic review of the state pension age from . They have not yet
published that review, but we have been seeing stories in the
media suggesting that there may be an announcement in the Budget
of a change in date for the increase in the state pension age to
68 from 2044 to sometime in the 2030s. I should probably declare
an interest in that, depending exactly when that choice is made,
it may change my own state pension date. That is on the record,
but I have no idea what year the Government are thinking
about.
I hesitate to say it, but this is actually a really important
decision that will have a very significant impact on a lot of
people. It needs to be made very carefully, and with very careful
consideration of the impacts on people of different genders,
backgrounds and occupations and on those in different parts of
the country. Its impact for a manual worker will be very
different from that for a professional, or someone living in an
area with much lower life expectancy than, say, in the south-east
of this country, and it is the same for those who have had a
high-earning career rather than a lower-earning one. So it is
quite a hard thing to get right, as various studies have shown.
The other reason to be very careful is that the whole success of
the pension regime depends on certainty and predictability, and
if people start to think that nothing is certain or predictable,
then they cannot have confidence, the whole basis on which we
save for our retirement starts to become unclear and people start
showing behaviours that we would much rather they did not
show.
I actually support—I did support and I still support—the position
the coalition Government got to in the 2010 to 2015 Parliament,
in which we raised the state pension age to 66 in 2011 and
brought forward the increase to 67 really quite considerably.
That was based on the principle that we should get roughly a
third of our adult life in retirement, and I think we should be
very clear about sticking to that principle. However, it is right
that, if life expectancy increases, that has to be paid for. If
we are going to get longer in retirement, we have to find a way
of paying for that. The inevitable impact is that we have to work
a bit longer to pay for that. If there is a clear principle that
we will spend about a third of our adult life in retirement,
people can at least understand what the situation is and what may
be coming down the line. I urge the Minister to not move away
from that principle, to at least give people that
understanding.
I fully support all the other pension reforms introduced by the
coalition Government, including the successful roll-out of
auto-enrolment and the introduction of the single-tier state
pension, which was designed to say to people, “You will get a
state pension and it will be above the poverty threshold, so
there will not be any means test. If you save more and have your
own private pension, you won’t be losing benefits.” It is
therefore absolutely worth saving for that pension. The success
of auto-enrolment ties directly into that. Everybody is clear
that it is well worth their doing that.
(North Ayrshire and Arran)
(SNP)
May I take the hon. Gentleman back to a point that he made a
moment ago about raising the pension age because of increasing
life expectancy? That has always been the justification that has
been given. However, at best, life expectancy is now stalling,
and in Scotland it has been falling for the past two years. Does
he agree that, in that context, it seems bizarre to use that
information to raise the age further and faster?
I will come to that point in my argument. If we accept that we
should stick to the principle that we get roughly a third of our
adult life in retirement, the reason why we would increase the
state pension age is that we have seen a three-year increase in
life expectancy, and that should give us two more years on the
state pension age. So for every 12 months life expectancy goes
up, people should effectively get four months of that in
retirement and expect to work for eight months of it. The hon.
Lady is right: the data does not now show, sadly, life expectancy
increasing, certainly not at the rate that was forecast by all
the actuarial calculations at the time of previous reviews. The
data for the 2018 to 2020 reference period showed that male life
expectancy had fallen by seven weeks compared with the 2015 to
2017 reference period, and female life expectancy had gone up by
half a week, or something really quite insignificant.
On that logic, we would be thinking, “Yes, we are due a periodic
review and it would say that nothing has changed—in fact it has
got a bit worse. There is nothing to see here, so let’s not make
any more changes.” The Minister can intervene if she wants to say
that that is what the review says, and we can all go home quite
early, but I suspect that nothing is ever quite that simple.
I suppose what we are asking the Minister to confirm later in the
debate is whether the Government will stick to the principle of
people getting a roughly fixed proportion of their adult life in
retirement, and whether they will therefore be guided by that 33%
figure. The hon. Lady’s point would appear to suggest that the
position is, if anything, worse than that at the time of the
Cridland review six years ago and we should presumably come to
the same conclusion as that. That is not what the media stories
are suggesting. They seem to be saying that the increase to 68,
scheduled for the mid-2040s, will come forward to perhaps as
early as the mid-2030s—possibly around 10 years from now.
That leads me on to two keys asks of the Government, and I think
they were principles that were previously set. First, increases
in the state pension age should always come with 10 years’
notice, so we should never give people less than 10 years to have
to change their retirement plans. Perhaps the Minister will
confirm that there will be at least 10 years’ notice.
Furthermore, we should make one of these changes only every 10
years; we should not be making multiple changes. Had the Cridland
review been handled differently, we could have had the increase
to 66 from 2011, the increase to 67 in 2014, and then the move to
68 a few years after that. That would have been far too much
change too quickly for people to handle.
Those key principles that we established were not that different
from what the Labour Government did in previous pension Acts when
they brought in pension age rises. It is overwhelmingly in the
interests of a stable pension system that we keep those
fundamental principles in place. We do not want to end up in
another situation like we had with the Women Against State
Pension Inequality Campaign, where women—and I met many of them
in my constituency—genuinely did not know that their state
pension age was going up significantly until they tried to claim
it or thought they were about to get it, only to in some cases
find out that it was another five or six years away. That is why
we need to ensure we have that certainty in place. I know that
that was changed in the Pensions Act 1995, so everybody had at
least 15 years’ notice for most of it, but people just were not
told, or at least not in a way that they understood or noticed.
We need a clear, stable pension architecture, as was established
under the coalition Government, with a single-tier state pension
above the poverty threshold, so that people could save for
themselves and had predictability.
This is not random conspiracy theory nonsense. Articles are
occasionally written by people who just do not believe that when
they get to retirement age, their state pension will be there, or
that they will ever get to it. In fact, there was an article in
the Daily Mail raising exactly that point. Reading other stuff
around, we see that there is a general pervasive fear that people
will never get to state pension age—that it will always be pushed
just out of reach and they will never actually get there. That is
why we need to be absolutely clear that that is not what we are
trying to do here. We have a predictable and reliable state
pension system that people can factor into their retirement
savings and then use to plan for the later years of their life. I
am sure the Minister will be able to reaffirm that that is
absolutely the Government’s position.
There is a question about whether the Government are minded to
make a change. I think the Cridland review suggested that we
could have brought the change forward to the late 2030s, at
least, so it should not be a complete surprise if we think that
2044 is probably too late and would result in that figure of
roughly 33% becoming a bit generous and people getting a bit
longer than that. We need to set out the rationale for that
pretty clearly and try to work through how we can help people who
will be put in the most difficult position by that change.
Intriguingly, the Cridland review said that if the Government are
after Budget savings, increasing the state pension age is not a
very clever way to do that. Instead, the review recommended
abolishing the pension triple lock, which, I suspect, is
not a view that has great support around Parliament. Hopefully
this latest review does not re-recommend that, and the Government
will not accept it if it does.
There were, though, some sensible analyses and recommendations as
to what we can do to help people who are out of work in their
mid-60s because they are either not really fit for work or not
realistically going to get a job then. How do we give them
financial support when we cannot give them their state pension?
Do we subject them to full universal credit conditionality, or
can we find a way of giving them a better experience? The review
recommended potentially allowing people to access the state
pension a year early, having a benefit equivalent to the state
pension at least a year early or having a tapering-off approach
to UC or UC conditionality, in case people fall out of work at
just the wrong point.
I am not actually aware that the Government have ever really put
in place any of those measures, so that would be another ask of
the Minister. If the Government are thinking of making a change,
while we do need the notice, can we also put in place a plan
early for handling those who will be the worst affected by the
change? I think we will need that for the rise to 67, anyway,
which is coming up much sooner. It is just not realistic for
people who fall out of work very late in their working life to
get another job, and leaving them in financial trouble for those
last few months before they get their pension seems to be a
rather inefficient and cruel situation. Hopefully we will have
made some progress on that before we get to the next pension
age.
I would also like to say that I do not think handling this sort
of issue as part of the Budget process is necessarily sensible.
This change will not affect the public finances this year or next
year, or, actually, the next Parliament; it may not be until the
Parliament after that, or possibly even the Parliament after
that, when this triggers any financial savings. There is not, as
far as I can tell, any real Budget sensitivity to how the
Government make this announcement, so I do not think we need to
have a shroud of secrecy over what the Government are thinking of
doing.
What the Government should do is publish the Neville-Rolfe
review. It would be helpful if could appear before
the Work and Pensions Committee and explain the findings of her
review. I think she has been brought back as a Minister in a
different Department, so I am not entirely clear whether that
would be permitted. Could we have a Minister from a different
Department answering questions about a review they led before
they were a Minister? I cannot think of any reason why not.
Perhaps the Minister could confirm that the Government would be
happy for her to come and explain the findings of her review. We
could then have an open consultation about the content of that
review and come up with a coherent policy, rather than it being
dropped out by the Treasury and perhaps consulted on afterwards.
The fear is always that once something has been announced, there
is much less chance of it being changed.
I hope that the Government will get the feeling from this debate
that people are concerned about there being further rises in the
state pension age before we have had a chance to assess fully the
impacts of the rise to 66—let alone the rise to 67 that is
coming. I think we all recognise that it is a difficult situation
and that it is worse for different parts of the country, worse
for people in different occupations and possibly worse for women
than for men. It would be useful to understand those implications
and how we can mitigate them before we make any further
decisions.
Fundamentally, if life expectancy data is not going as has been
forecast, we should respond to the facts as they change and
accept that our policy on expected changes to the state pension
age can change as well, that we do not need the increases to come
as fast and as often as we had thought, and that we should just
leave things as they are. Let us hope that life expectancy starts
to increase again. We can make these decisions then, rather than
rushing into things that really hurt people, that bring
uncertainty to the pension system—we do not need that—and that
will probably not bring any financial savings for several
Chancellors.
I look forward to hearing what the Minister has to say. Let me
restate my point: our pension architecture and the foundations on
which we have been trying to build the system are all still there
and are robust, and we can all rely on them.
16:36:00
Sir (East Ham) (Lab)
I congratulate the hon. Member for Amber Valley () on securing this Backbench
Business debate, which gives us the chance to ask for the
Government’s views on this topic of great importance and enormous
public interest. I am delighted that the Pensions Minister, the
hon. Member for Sevenoaks (), and the former Pensions
Minister, the hon. Member for Hexham (), are in their places on the Front Bench.
I agree with much of what the hon. Member for Amber Valley said.
The idea of spending a third of adult life in retirement is a
sensible yardstick to run with. He made the point, in passing,
about the importance of implementing the recommendations of the
auto-enrolment review, and I agree with him that that is
important. We are repeatedly told that it will be done in the
mid-2020s, but time to implement it before 2025 is either running
out or has possibly already run out.
In my remarks, I will focus on the process we are in. I recall
the wise words of , who said:
“Sunlight is the best disinfectant.”
He argued—rightly, in my view—for a culture of openness in
government. One of the results of his view was the 2010 protocol
on publication of all Government social research, which was most
recently updated last year. It states:
“Principle 1: The products from government social research and
analysis will be made publicly available”,
and that research should be published “promptly”, within 12 weeks
of completion.
For a number of years, that was, to their credit, the
Government’s approach. In 2017, when the first review of state
pension age was undertaken for the Government by John Cridland—as
the hon. Member for Amber Valley has pointed out—his report, and
the report of the Government Actuary, were both published on 23
March 2017, nearly four months before the DWP’s own review was
set out on 19 July 2017, shortly after the hon. Member for Hexham
took up his former post as Pensions Minister in June 2017.
I have often expressed great regret that the Department, for some
reason or other—perhaps reflecting a different approach across
Government—has abandoned the practice set out by and instead now resists
publication of research and analysis, or delays it for as long as
it possibly can. Preventing public discussion no doubt has the
benefit of allowing Ministers to avoid having to answer difficult
questions, but it has the disastrous drawback of worsening policy
outcomes. The policy cannot be informed by public debate before
the decisions are made, because the evidence that would allow a
debate is not available. The Government publication protocol was
watered down a little last year, but its essential gist remains
unchanged. It says, for example:
“The primary purpose of social research commissioned and
conducted by government is to inform…policy and delivery, but it
also plays a role in wider policy debate.”
That is quite right, but, as we have discussed in the Chamber on
various occasions, in the DWP the requirements of the protocol
are simply ignored. They are not being fulfilled.
I have been hoping very much that the new ministerial team will
turn over a new leaf and take a more enlightened approach.
Indeed, the new Secretary of State has hinted that he is
considering the advantages of greater openness. But here we have
a flagrant example of his predecessor’s bad habits of hiding
analysis and evidence until it is convenient to the Government to
release them. Instead of publishing the evidence four months
before the Government’s decision, as was done in 2017—around the
time the former pensions Minister, the hon. Member for Hexham,
was appointed—the Department is keeping the evidence hidden until
it makes its announcement “early in 2023”. Presumably, as the
hon. Member for Amber Valley has suggested, that will be at the
time of the Budget next month.
In my brief contribution to this important debate, I mainly want
to press the Minister to publish now both the report by the
independent reviewer, , which the Secretary
of State received on 16 September last year—more than four months
ago—and the related Government Actuary’s report, which was
submitted to Ministers on 5 October. Publish them now. Why have
they not been published already? What possible benefit can there
be in keeping this important work and evidence hidden for all
this time?
The Select Committee has published today an exchange of letters
with the Minister on the subject. When asked why these reports
are not being published before the Government’s announcement as
they were for the 2017 review, the Minister, who is in her place,
replied that
“this is a different publication schedule to the last review, the
issues are still under consideration and so we think this
approach is more appropriate.”
In other words, they appear to be saying, “We don’t want anyone
to see the evidence until we have made up our mind. This is still
under consideration, so we think it is not appropriate to publish
the evidence.” Surely, there ought to be a public debate about
all this before the Government make their decision, not
afterwards. This instinct of hiding things, not disclosing them,
and not complying with the requirements of the cross-Government
protocol is very damaging to the Government’s ability to make
good policy.
Surely, Ministers should take advantage of public debate to
inform their decisions, rather than refusing to show anyone the
evidence until after the Government have made up their mind. What
has become of David Cameron’s belief in sunlight? We are talking
here not about confidential advice to Ministers—there is no
requirement to publish that—but rather about expert analysis that
will eventually be published, and which sets out the evidence
that will underpin the Government’s decision. Publish it now so
that everybody can see it. The protocol says that
“analysis should be published promptly…as early as possible
following agreement of the final output.”
So it should be. The recent independent review was announced in
December 2021. The terms of reference said that it should explore
what metrics the Government should take into account when
considering how to set state pension age. They stated that it
should include a consideration of recent trends in life
expectancy in every part of the United Kingdom; whether it
remained right for there to be a fixed proportion of adult life
that people should, on average, expect to spend over state
pension age, and what metrics would enable state pension costs,
and the importance of sharing those fairly between generations,
to be taken into account.
The Select Committee agreed months ago that once Baroness
Neville-Rolfe’s review had been published, we would take evidence
on it, including from her, as the hon. Member for Amber Valley
said, before the Government announced their decision. Now that
the Government are unwilling to publish the analysis before they
announce their decision, we clearly cannot do that.
The Sun has reported that the Government plan to raise the state
pension age from 67 to 68 as early as 2035, which will affect
everyone who is 54 and under, instead of 10 years later, as set
out in current legislation. Is that the right thing to do? Well,
we need to see the evidence. The key evidence is about future
projections of life expectancy. As we heard from the SNP
spokesperson, the hon. Member for North Ayrshire and Arran
(), emerging evidence shows
that the trend of rising life expectancy is not what it was
before the pandemic.
One of the expert witnesses at this morning’s meeting of the
Select Committee said, “Mortality seems to have peaked, because
one reason why there was increasing mortality was that the second
world war lifestyle was ironically quite healthy for people, and
the numbers are now going down quite a lot.” We were discussing
something else this morning, and I do not know what evidence the
witness was drawing on there, but I do not know what evidence the
Government will draw on either, because it has not been published
and it should have been. There should be no delay in publishing
it.
Cohort life expectancy statistics are produced every two years. A
new set is expected this year. The latest, 2020-based projections
show life expectancy at 65 still rising, but at a slower rate
than in previous releases. Of course, the 2020 figures did not
take any account of changes arising from the pandemic. The change
in projection has prompted some commentators to call for the
planned rises in the state pension age to be abandoned, or at
least to be slowed.
Lane Clark & Peacock took the latest Office for National
Statistics life expectancy projections and reran the 2017
calculations of the Government Actuary’s Department. They
concluded that any move from 67 to 68 would not be needed until
the mid-2060s rather than the mid-2040s, and certainly not by the
late 2030s, as suggested by The Sun. They also suggested that the
move from 66 to 67, which is currently scheduled to be phased in
over two years from 2026, could be put back until the end of the
2040s. They went on to argue that if further ONS statistics show
relatively lower life expectancy growth, that could imply further
delays to planned increases, and perhaps even abandoning the
planned rise to 67.
The former pensions Minister but two—I think— , who is now a partner at Lane
Clark & Peacock said:
“The Government’s plans for rapid increases in state pension age
have been blown out of the water by this new analysis. Even
before the Pandemic hit, the improvements in life expectancy
which we had seen over the last century had almost ground to a
halt.”
Those are important public policy questions. They should be
debated in Parliament and among the public before the Government
announce their decision, so that that public and parliamentary
debate can inform the Government’s decision. We should not just
see the evidence after the Government have announced what they
plan to do, because changing the Government’s mind at that point
will not happen.
A wide public debate should take place now, but it cannot happen
unless the independent review and the Government Actuary’s report
are published before the announcement is made. I ask the Minister
to resist the temptation to keep the documents hidden for even
longer and instead to remember the wise words of , and to be open and publish
those two key documents.
16:49:00
(Dover) (Con)
It is a pleasure to follow the right hon. Member for East Ham
(Sir ). He is very knowledgeable
about these matters, as his comments demonstrated; I thank him
for them. I am grateful to my hon. Friend the Member for Amber
Valley () for securing the debate and to
the Backbench Business Committee for agreeing to it, because
statutory pension age and pension amounts are of such importance
to my constituents in Dover and Deal.
For a person of my age, the statutory pension is like one of
those Scottish mountains. It is an optical illusion: as we get
ever closer, it seems that there is just that bit further to go.
When I started my working life, my pension age was 60. When it
was changed in 2010, I was already roughly two thirds of the way
through my expected working life. Should the pension age be
raised to 68, a woman of my age, at current rates, will have lost
out on the equivalent of between £59,000 and £77,000. That
matters because of the basis on which I began paying national
insurance contributions when I started work.
The first point that I would like to raise on behalf of all
pensioners-to-be is that pensions are an unusual area because the
rules on grandfathering rights that are usually applied are
simply not followed. Surely it would be fairer to use the basis
that applied at the point at which people started to work and
started to pay national insurance contributions. If someone’s
pension age is to be changed, it should be changed in the first
third of their expected working life, not right towards the end.
No one affected by a date change can go back in time to take out
an ISA, top up their pension or use their income differently, as
they might have done if they had known that such changes were
due. People affected by the changes might have made different
decisions if they had known that they would have to work for
considerably longer, and it might have made a difference to their
quality of life at an older age.
Secondly, people might have made different career choices or made
career changes if they had known that they would have to work for
longer. Thirdly, the expected extra years of work—eight whole
years, in the case of women of my age—may mean that people will
need extra skills training and support during their working life.
If the pension age is to be extended even further, budgetary
consideration will need to be given to support for lifelong
learning, with leave being given for skilling up and study being
prioritised for people affected by the change.
For many people, the ages of 60 to 68 represent a period in
which, in the eyes of bosses or fellow workers, they may be
considered past the peak of employability. I am pleased to say
that that is not the case for contributions in this place, but
age discrimination in our society is very real. I suggest that no
further changes should be made to pension age unless such age
discrimination is firmly and clearly tackled.
If we want people to work later in life, we have to give them the
tools, support and legal protection that they need to do so. That
is all the more important because age discrimination in
particular terms and conditions of employment is currently
perfectly legal. If the pension age is to be extended, the law
needs to be changed. Age discrimination, like any other form of
discrimination, is humiliating, demeaning and damaging. We do not
want to subject people to it by making them remain in work while
such prejudice continues.
I have a constituent, Stephen, who at the age of 66 —the current
statutory pensionable age—is facing just such lawful age
discrimination. He has worked for a very large Kent company for
more than 30 years. He is an effective, respected and well-liked
employee with a fantastic track record of work. When Stephen
reached his 66th birthday, he did not get a birthday card from
his bosses; he got a letter to the effect that it was not
possible to sack him on grounds of age, so instead they were
terminating his life insurance, his health insurance and all his
other insurance benefits.
Stephen was doing the same job at 66, at 66 minus one day and at
66 plus one day, but now he does not get the same money’s worth
in relation to his contract of employment. If he falls ill, he
cannot get the same access to speedy private healthcare that
other people working for the company can. If—heaven forbid—he
died, his wife would no longer have compensatory insurance.
However, he is doing exactly the same job as someone else. It is
the same job he did before, and the same job he will do the day
after. The attitude demonstrated by the company communicates to
him and to the wider employment community in Kent that it thinks
a person who is older is worth less. We must tackle that issue if
people are to stay in the workplace longer.
I have looked into the policy considerations that are sometimes
put forward. The first, essentially, is that an older person does
not need to work. As a woman who has been in the workplace for
quite a long time now, I remember a time when employers would say
that a woman did not need to work, did not need to get the same
bonuses as a man, and did not need to be offered overtime,
because it was men who had families to feed. We have outlawed
that, because equal pay at work is not about who is doing the
work, but about what the work is. Allowing age discrimination, as
we do now, sends a message that an older person is not worth the
same as a younger one. The continual changes in the pension age
also send a clear message that older people’s safety, stability
and security in managing their own lives are not a priority.
The second reason put forward is that it becomes more expensive
for everyone—the premium for the company itself goes up—if older
people are included in corporate benefits, or global benefits,
beyond the statutory age. To apply that logic, would it be okay
to disallow health cover in an employment context to someone who
had a chronic condition that could give rise, or had given rise,
to needing that policy? Of course not; we would say that that was
discriminatory and wrong. At the heart of equalities law is the
fundamental view that employers cannot discriminate between those
they employ based on characteristics that are not relevant to
whether they can carry out the job. By continuing a discussion of
the type that has been happening about the pension age moving and
whether people will be supported in older-age working, we are
failing to address this absolutely dreadful discriminatory
environment.
The third and final reason given is that a disincentive to
recruit older workers would be created, because the costs I have
mentioned would be higher for the company. I agree that we do not
want to create disincentives to employing older people,
particularly if we are to require people to work for years and
years more than they had expected, but the argument sounds
awfully similar to the well-known discussion about whether the
cost of maternity leave would dissuade employers from employing
women who become pregnant. We outlawed that, and we know that a
woman can still add value, be productive and be effective when
pregnant, so why are we making people work longer? Why are we
raising the statutory pension age and communicating from this
Parliament that it is okay to discriminate against older workers?
It is not, and it is wrong—all the more so if the pension age is
raised from 66 to 68, because we would be raising it above an age
at which employers are already discriminating against workers, as
I have illustrated. Unless we tackle age discrimination, we will
continue to have an environment in which it will be very
difficult for people who are working in older age.
As these pension changes are brought forward, I do not feel that
enough has been done to support, encourage and incentivise
employers to look favourably on an older workforce. For example,
national insurance contributions could be reduced for older
workers. Also, if people are excluded from benefits by reason of
the current law, older workers should receive money or money’s
worth in cash or vouchers to make up for the work benefits that
have been removed from them.
By way of conclusion, I am not persuaded by the arguments for
increasing the pension age further or discriminating on the
grounds of age. It is simply not acceptable. There is no
justification for the treatment of my hard-working and loyal
constituent Stephen with the discrimination he has faced in his
workplace. If the pension age is to be raised again and we are
going to keep making these changes, forcing people to stay in
work for longer, age discrimination must be tackled first. We
should be taking steps now to change behaviours in the workplace
to make sure that older people who now have to work longer will
be able to do so and will be treated fairly and equitably. We
should be outlawing this outdated and discriminatory law against
older workers.
17:00:00
(North East Fife)
(LD)
I congratulate the hon. Member for Amber Valley () on securing this debate. How
to calculate the state pension age is an intensely technical
topic, but it fundamentally impacts on people’s lives, and what
we have heard so far this afternoon illustrates that, because
there is a great deal of consensus across the Benches. I
congratulate the hon. Member for Dover (Mrs Elphicke) on her
speech and the areas she covered.
Obviously, it is our job on the Opposition Benches to scrutinise
the Government, and I do not expect the Minister to pre-empt an
independent review process, but I absolutely agree with the Chair
of the Work and Pensions Committee, the right hon. Member for
East Ham (Sir ) that we should be publishing
any reports and looking at this issue before the Government make
a final decision in the public space. This debate is an
opportunity for the Government to make a political statement to
commit to some of the existing methodologies we have used to date
for the state pension age, and primarily that means keeping it
based on life expectancy.
We have heard significant concerns today that planned pension
ages might be accelerated, and that does not fit with what we are
seeing with life expectancy. As the hon. Member for North
Ayrshire and Arran () said in her intervention,
life expectancy is not increasing. In fact, the evidence suggests
it is falling, so far from seeing the retirement age going up
faster, we should be seeing no change or at the very least a
slowdown in planned increases.
It is highly technical, looking at actuarial tables to work out
statistics, but it is important that we do not forget the faces
behind the figures. In fairness, the WASPI women have made sure
that we never forget the faces again. I am sure that every Member
here, including the Minister and me, will have spoken with WASPI
women in their constituencies about what they have suffered as a
result of process failures with previous age increases. I have
met many of the representatives who come to Parliament on fiscal
event days. They often stand in the cold and damp waiting all day
to be heard. I urge the Minister and Members across the House to
meet them, if they have not done so previously.
Although this debate is about the future, I cannot mention the
WASPI women without talking about their ongoing right for
compensation. They have been waiting years now, and thousands
have died without ever seeing a penny. The ombudsman is expected
to report within a matter of months, but the only thing that has
taken longer than their investigation is the Government’s
inability to decide to do the right thing and to promise to
follow the results of that report. I hope the Minister will make
reference to that in her closing remarks.
The Government must learn lessons from what has happened to the
WASPI women. If we are going to see changes, they must be
communicated early and fully. People must be able to plan ahead.
Age UK suggests 10 years as the length of time in which people
need certainty to plan for retirement, as the hon. Member for
Amber Valley mentioned. I hope that the Government can continue
to commit to that.
I said it was important to remember the faces behind the figures,
and it is vital that the Government remember that life expectancy
is based on averages, and that all people are not alike. There
are already people struggling to work to 66 through no fault of
their own. Manual workers, whether farmers or factory workers,
are just more likely to struggle to keep up as the impact of a
life of labouring catches up with them. The fictional police
sergeant Catherine Cawood of “Happy Valley” may hopefully be
reaching her retirement from the police on Sunday night in the
concluding episode of the series, but she will be 56 when she
does so. That is because we accept that police officers are not
necessarily physically capable of being able to chase offenders
or fight or do any of the physical things we expect. We may hope,
however, that Catherine Cawood, as well as going to the
Himalayas, can also continue to contribute in a part-time work
capacity elsewhere.
Health problems for many mean that people cannot work full time.
Part-time working is increasing, and many people have caring
responsibilities. This is the generation of sandwich carers who
take care of their parents, their children or grandchildren and,
when needed, their partners. There is of course a benefit to the
economy, and to older workers themselves, of continuing to work
if they can. If that is the Government’s aim, I implore them to
see that increasing the state pension age, when we are not seeing
a corresponding rise in health and life expectancy, is not the
solution. People might be living longer, but they are not
necessarily doing so in good health.
There are steps that the Government could take. I continue to
champion the needs of unpaid carers, many of whom are in the
pre-retirement age bracket. I welcome the Government’s support
for my Carer’s Leave Bill, which will have its Third Reading on
Friday, and look forward to their support as it passes through
the Lords, but there is still much to do. Reforming carer’s
allowance, securing flexible working as a day one right, offering
more training and respite for carers, and investing in local
services such as day centres would all help, as would more
re-training, as the hon. Member for Dover mentioned, and a
greater understanding of what is keeping older workers out of the
workforce. We need to ensure that there is a social security net
for people who have paid in and who, for whatever reason, cannot
manage those final few years. That would be more effective at
encouraging people to work longer, even past retirement age, than
just forcing people somehow to soldier on.
Of course, there is a balance to be struck. The pension age must
be both effective and sustainable. I agree that it must
realistically reflect how long people can expect to live after
retirement. We all see adverts pop up on our social media about
how to retire at 40, but we know the Government could not be
expected to fund such a period. Knowing that there is a balance
means also making the expectation of the state pension realistic.
I want my children, and my children’s children, to have it to
look forward to one day. Our younger generations have suffered
the outcomes of Brexit, of covid and of the cost of living
crisis. Owning a house is a dream, not a reality for far too
many. Future generations deserve the same promises, the same
security as those that came before. We must not pull up the
ladder.
I urge the Government to use this opportunity to reassure the
House that they will follow the rules on determining retirement
age by looking at life expectancy, protect those who struggle to
work later in life and help those in work who can do so. Too
often in recent years the Government have trailed potentially
detrimental pension changes only to withdraw them later. Today’s
debate gives them an opportunity to make sure that that is not
the case in future.
17:07:00
(North Ayrshire and Arran)
(SNP)
I echo the appreciation of the hon. Member for Amber Valley
() for bringing the debate on the
state pension age to the Floor of the House today. There is great
concern that, according to reports, the UK Government plan to
accelerate their current timeline for increasing the state
pension age again, raising it to 68 by 2034. That means that
those born in the 1970s or later could soon be told that a review
of the increase in state pension age will further delay their
retirement. If the Minister can tell us that that simply will not
happen, we can all just go home and not worry about it, as the
hon. Gentleman and the hon. Member for North East Fife () said. We would all be
delighted.
It is bad enough that the state pension age is due to rise again
from 66 to 67 by 2028. It is even worse that the women born in
the 1950s had their state pension age increased with little or no
notice, a move that has robbed them of tens of thousands of
pounds of their hard-earned and expected state pension, throwing
many of them into deep poverty and unnecessary hardship. That is
all bad enough, but now we face the prospect of the Government
planning to bring forward the increase in retirement age from 67
to 68 from 2046 to affect anyone now aged 54 or younger.
The Minister may say that no final decision has been taken, but
how can anyone, having witnessed how women born in the 1950s have
been treated, have any real faith that the Government understand
how the increase in retirement age would have a disproportionate
impact on those who have worked all their lives for poor pay? The
UK already has one of the lowest pensions in Europe, and these
plans will have an impact on millions of people, many of whom are
already struggling financially. Age UK has said that
“any Government decision to accelerate the rise in Pension Age
will condemn millions to a miserable and impoverished run up to
retirement—and often beyond too”.
So many people are already in poor health by the time they reach
their state pension and they are already suffering financial
hardship.
As the hon. Member for North East Fife said, probably every one
of us has spoken to women born in the 1950s, and when we do they
tell us that the biggest UK Government swindle in recent memory
was robbing their generation of their rightful state pensions at
the age of 60. Many discovered, often by sheer accident, that
their anticipated pension would not arrive until years later, as
there was equalisation with men. The anger, sense of betrayal and
disappointment was only inflamed when UK Government Ministers
bizarrely and insensitively insisted that this provided an
opportunity for the women affected to train for new careers. Some
of them then formed the Women Against State Pension Inequality
Campaign, which continues to campaign for the injustice against
them to be recognised and remedied. They must be given the
compensation that is their right and I applaud the work they have
done, because those women faced delays of up to six years to
access their state pension, one in four of them now struggle to
make payments on crucial bills and one third are in debt, with
single women the worst affected. So that we can avoid this
happening again, will the Minister tell us what impact assessment
the UK Government have carried out, or will carry out, on any
further proposals to accelerate the rise in the state pension age
to 68 by 2034 or, indeed, to accelerate it at all?
It seems to the people outside this Chamber who are worried about
this or who have experienced this, as the WASPI women have, that
this Government have developed a taste for robbing people of
their hard-earned state pension. The website Interactive Investor
calculates that bringing forward to 2034 the increase in
someone’s pension age to 68 could mean a lost year of full state
pension of almost £17,000 for workers aged 46. Royal London
insurance found that more than half of those aged 55 and over are
likely to have the state pension as their main income, with 1.5
million of those in pre-state-pension years, and 31 % with no
savings at all to fall back on. Many of them are also struggling
with caring responsibilities as well as financial ones.
Pensioners relying on state pension as their main source of
income are more likely to have already undergone a working life
of low pay, and they are more likely to have health challenges in
retirement and a shorter life expectancy. They are also the
pensioners who simply cannot afford to retire early, even when
health problems occur. Raising the retirement age even further
will therefore have a disproportionate effect on poorer older
people who will enjoy fewer retirement years.
A review of the state pension age in 2017 established that people
should expect to spend one third of their adult life in
retirement. As we know and as has been said, life expectancy in
the UK is, at best, stagnating, which seriously undermines the
case for raising the state pension age. I am afraid that those
considerations will not have an impact on Government thinking and
that the very logic they have used in the past for increasing
state pension age—rising life expectancy—will not apply. If that
is the case, I would remind the Minister that not only have life
expectancy rates stalled across the UK, but they have actually
fallen for the second year in a row in Scotland. Perhaps the
Minister would like to factor that in when determining the state
pension age. According to the UK Government’s own argument and
the logic they have used so far, the state pension age should
perhaps even be falling.
The UK Government must abandon any further acceleration of the
state pension age across the UK. I hope that all parties will
oppose that and commit to continuing that opposition beyond the
next election. As the hon. Member for Amber Valley said, if you
keep tinkering with, accelerating and rising the state pension
age, you create uncertainty and undermine the whole concept of a
state pension, perhaps fatally undermining it for future
generations.
Even talk of accelerating the state pension age feels like a
grubby smash and grab of people’s hard-earned pensions to try to
fill the black hole in the UK’s finances, which is a consequence
of 13 years of austerity. That austerity started under Labour’s
and has continued ever since,
compounded by the damage of Brexit to which Labour is fully
signed up, cynically and disingenuously pretending that there is
such a thing as a good Brexit after all. Labour knows that, but
it is so desperate to win seats in England, it will say anything.
But the public are watching.
To raise the state pension age further is bad enough. To raise it
even faster than originally planned as a cost-cutting measure is
unforgivable. People in Scotland were told in 2014 that the only
way to protect the state pension was to vote no to independence.
Here we are nine years later, and the state pension does not
support the minimum standard of living. Pensioners have already
been short-changed by £6,500 on average, due to the state pension
underpayments to around 237,000 older people, and a further
100,000 potential underpayments that have been identified, which
will take a year to correct. Let us not forget how easily the
Government discarded their manifesto commitment to retain the
triple lock, the abandonment of which means that current state
pension payments are £520 less than they otherwise would have
been.
We must all learn from the huge injustice perpetrated on WASPI
women—I applaud their campaign for justice—but we cannot permit
even more people to be robbed of tens of thousands of pounds of
their rightful state pension as life expectancy stalls or even
falls in Scotland. Meanwhile, our Government desperately seek to
fill their financial black hole because of their own
incompetence, and therefore have decided to pick a fight over
pensions. That is an outrage. In the dying days of this
Government, as they thrash around seeking to pick the pockets of
others to pay for their own economic mismanagement, we must say
that enough is enough.
17:17:00
(Reading East) (Lab)
Pensions are an incredibly important issue. People who have
worked hard and contributed all their lives deserve a decent
pension in retirement. The state pension has been a crucial part
of all our lives in this country for a very long time. I thank
the Backbench Business Committee for securing today’s debate, and
the hon. Member for Amber Valley () and Members across the House
for their contributions.
I am sorry to say that there has been a certain amount of
unhelpful briefing in the media about a possible change to
Government policy on state pension age. I urge the Government to
stop that, and to raise issues in this House rather than in the
media. If Ministers are serious, they should discuss the future
of pensions policy with the public and the pensions industry in a
proper public consultation. The current speculation fuelled by
off-the-record briefings is hugely unsettling for people who are
saving for a pension and trying to plan for their future.
Ministers should remember that families and pensioners are living
through an unprecedented cost of living crisis and facing huge
pressures on household budgets. The last thing that people need
is further stress and uncertainty.
We are living in challenging times, with inflation rates that the
country has not seen for more 40 years. To make matters worse, as
the IMF reported earlier this week, the UK faces the worst
economic outlook of any major economy. After 12 years of economic
mismanagement by the current Government, we are stuck in a period
of persistently low growth and, unfortunately, persistently high
inflation. As a direct result of that mismanagement, the
Government are now trying to cut public spending. They have
reduced spending on the state pension before by failing to
increase pensions in line with inflation until April this year.
That means that pensions have failed to keep up with the huge
rise in the cost of food and fuel that has hit pensioners in the
last six months.
Independent research by the Pensions and Lifetime Savings
Association using data from Loughborough University showed the
scale of the Government’s failure. It showed that the basic state
pension has now fallen below the cost of living. The PLSA put the
basic cost of living for a single pensioner at £12,800, more than
£2,000 above the basic state pension, which will be £10,600 in
the financial year 2023-24.
The Government’s mismanagement of the economy and their desperate
attempts to cut public spending form the backdrop to today’s
debate. This is made even worse by Ministers’ disregard for
pensioners, the House and the public. The Government’s pattern of
behaviour is in stark contrast to the way in which Governments
have conducted themselves in the past. As I mentioned earlier,
there has been a long-standing convention that pensions policy is
based on evidence and agreed by consensus. For example, when the
evidence showed that life expectancy was increasing, there was a
discussion about the impact on the state pension age, and it was
agreed that it should be gradually increased. The UK already has
one of the higher state pension ages among OECD countries.
Following extensive consultation about the impact of increased
life expectancy in the 2000s, the Government established the
Pensions Commission to look into the issue. As a result, and
after a great deal of discussion, it was agreed that the state
pension age should be raised. The Pensions Act 2007 provided for
it to be increased from 65 to 68 in stages over the period
between 2024 and 2046. I should stress that those increases were
agreed at a time of steady rises in life expectancy. The current
situation is somewhat different, to say the least. As we heard
earlier, there is clear evidence of a stalling of the increase in
life expectancy. Data from the Office for National Statistics on
healthy life expectancy between 2018 and 2020 shows a downward
trend in most regions of the UK, and the situation for some
pensioners seems to be even worse, with a fall in life expectancy
among some groups since 2010. We have heard several examples of
that today, and there are others.
There is also clear and, in my view, deeply troubling evidence of
local disparities, with gaps of about 10 years between the
average life expectancy of some people—often those living in
better-off areas—and that of their neighbours living in less
well-off areas comparatively nearby. The full impact of the
pandemic on long-term health is unclear, and there seem to be a
growing number of older people of working age who are suffering
from serious health conditions. That evidence needs to be
considered carefully.
I appreciate that time is limited. Let me end by saying that the
Government are letting down both pensioners and people saving for
pensions. They have broken with the long-standing convention that
pensions policy is developed on the basis of evidence, through
consultation and discussion. I hope the Minister will address
these issues in her speech. I know that she does prefer to
consult, even if some of her colleagues do not always follow that
approach.
17:22:00
The Parliamentary Under-Secretary of State for Work and Pensions
()
I thank my hon. Friend the Member for Amber Valley () for raising this important
issue, and all the other Members who have contributed to the
debate.
The Government remain committed to ensuring that older people can
live with the dignity and respect they deserve, and I absolutely
reaffirm that the state pension is and will remain the foundation
of state support for older people. As has already been pointed
out today, changes in the state pension age have been made in a
series of Acts by successive Governments from 1995—when the state
pension ages of men and women were equalised—onwards, following
public consultations and extensive debates in both Houses.
The state pension age is currently 66, and will increase to 67 in
2026-28. As was mentioned by the hon. Member for Reading East
(), Labour legislated for it to
increase to 68 in 2044-46, but, following the Cridland review of
2017, the current Government policy is to bring the increase to
68 forward to 2037-39. That is the baseline; we are required
under law to review it every six years, and that is what is now
being undertaken.
As we heard from my hon. Friend the Member for Amber Valley, the
coalition Government of 2010 to 2015 were committed to the “core
principle” that people should spend, on average,
“up to one third of their adult life drawing a State
Pension.”
They were also committed to giving individuals at least 10 years’
notice of any changes affecting them. The first review of the
state pension age following the Pensions Act 2014 was undertaken
in 2017, informed by both the Government Actuary’s report and the
independent report undertaken by John Cridland. As I have set
out, Cridland recommended bringing forward the increase in the
state pension age to 68 from 2044 to 2026, as set out in
legislation, to 2037 to 2039.
Sir
The two documents from 2017 to which the Minister referred were
published four months before the Government’s announcement. Why
have the Government not published the documents before their
announcement this time around, and will she do so now?
I had a suspicion that the right hon. Gentleman might bring that
up. As he rightly pointed out, I have written to him today to
explain the rationale behind this, but I will confirm that both
documents will be published in full. I look forward to discussing
them with his Committee in due course.
Sir
I just want to know why they have not been published. What is the
public interest in keeping these things hidden?
As I have said, they will be published in full. On the timing of
publication, there is work going on in Government to undertake
the review. Once it is finished the documents will be
published.
The 2017 review was based on a recommendation to aim for “up to
32%” as the average proportion of adult life spent in receipt of
state pension. The review used 2014-based life expectancy data.
The Government accepted those recommendations, subject to a
further review, before tabling the requisite legislative
amendments. The savings from bringing forward this rise to 68
have already been included in published fiscal forecasts.
On 14 December 2021, the Government launched the second periodic
review of the state pension age, and work is now under way to
complete it, as required by legislation. The review must be
published by May 2023, in accordance with section 27 of the
Pensions Act 2014. At the autumn statement, the Chancellor
committed to concluding the review in early 2023.
As part of the second review, the Secretary of State is
considering evidence from two independent reports. The first, a
report from the Government Actuary, assesses the latest life
expectancy projections from all regions of the UK. There has been
a lot of talk about life expectancy today, so I want to put on
record the fact that the most recent projections from the Office
for National Statistics show a slower rate of improvement in life
expectancy than those that informed the Pensions Act 2014 and the
Pension Schemes Act 2017. Nevertheless, despite the slower
improvement rate, ONS projections continue to show increasing
life expectancy over time, and the number of people over state
pension age is expected to continue to rise. I can also confirm
for the hon. Member for North East Fife () that the review will
consider the latest recommendations, as well as a wide range of
other evidence, before reaching any conclusions about the state
pension age.
The second report that will be taken into account is an
independent report by , which will consider
recent trends in life expectancy and the range of metrics that we
could use when setting the state pension age, including the
metrics mentioned by my hon. Friend the Member for Amber Valley.
We will publish both documents in full. With respect to the
question of whether will appear before
the Select Committee on Work and Pensions, that is a matter for
the Committee and for her.
Alongside examining the implications of the latest life
expectancy data, the Government review is assessing the costs of
an ageing society and future state pension expenditure, as well
as considering labour market changes and people’s ability and
opportunities to work up to state pension age, bearing in mind
recent trends in life expectancy.
My hon. Friend the Member for Amber Valley highlighted the
position of those who cannot continue to work. The review will
evaluate the impact of previous changes to the state pension age
for all individuals, including those with long-term health
conditions or disability. The Government continue to provide
substantial support for people who are unable to work.
My hon. Friend the Member for Dover (Mrs Elphicke) made some
important points about age discrimination. The Government’s
business champion for older workers, Andy Briggs, spearheads the
Government’s work to promote the benefits of older workers and
multigenerational workforces across England, influencing them
strategically and by offering practical advice. I will ensure
that my hon. Friend’s points about discrimination are passed on
to the Department for Business, Energy and Industrial
Strategy.
The review will aim to keep the right balance between
affordability, sustainability and fairness between generations.
The review has not yet concluded—it is very important to
emphasise that, given some of the comments today—and I will not
pre-empt its outcome. The Government are committed to ensuring
that older people have dignity and security in later life,
regardless of where in the UK they are living. The Government
introduced further targeted support, including cost of living
payments of up to £900 for the most vulnerable households and an
additional £1 billion, including Barnett impact, to enable the
extension of the household support fund in England in the next
financial year. Since 2010, the full yearly amount of the basic
state pension has risen by over £2,300 in cash terms. That is
£790 higher than if it had been uprated by prices, and £945 more
than if it had been uprated by earnings. For the first time, from
April 2023, the full rate of the new state pension is worth over
£10,000 per year.
Automatic enrolment is having a transformational effect on
private savings. Over 10.8 million people have been automatically
enrolled in a workplace pension, helping to deliver about an
additional £33 billion into pension savings in real terms in 2021
compared with 2012. The hon. Member for North East Fife mentioned
the PHSO inquiry. She will know that that is ongoing, so it would
be inappropriate for me to comment on it until it concludes.
The Government are committed to ensuring that the state pension
continues to provide the foundation for people’s retirement
income and are proud of the support they have given pensioners
since 2010. I welcome today’s debate and thank my hon. Friend the
Member for Amber Valley. As I have outlined, the Government take
the setting of the state pension age very seriously. I look
forward to being able to discuss this matter further—I am sure we
will—when the Government finally publish their second review.
17:31:00
I thank all Members for taking part in the debate and the
Minister for responding to it. I do not think anybody spoke in
favour of bringing forward an increase in the state pension age.
I hope the Government will factor it in that, on a cross-party
basis, there is not a lot of inclination for that. I hope we get
to see the completed review in relatively short order, and that
no decision will be taken until it has been published and there
has been a chance for further consultation and consideration. I
do not see any need for a rush, so I hope the Government will
take a consultative approach. With that, I thank all those who
took part.
Question put and agreed to.
Resolved,
That this House has considered the matter of raising the State
Pension age to 68.
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