The Secretary of State for Work and Pensions (Mel Stride) With
permission, Madam Deputy Speaker, I will make a statement on the
second review of the state pension age, which I am publishing
today. The purpose of this review has been to determine whether the
existing rules about pensionable age remain appropriate, as
required by the Pensions Act 2014. Two reports commissioned by the
Government have formed part of the evidence base: one from the
Government Actuary and an...Request free
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The Secretary of State for Work and Pensions ()
With permission, Madam Deputy Speaker, I will make a statement on
the second review of the state pension age, which I am publishing
today.
The purpose of this review has been to determine whether the
existing rules about pensionable age remain appropriate, as
required by the Pensions Act 2014. Two reports commissioned by
the Government have formed part of the evidence base: one from
the Government Actuary and an independent report led by , both of which I am
publishing alongside this review.
l am grateful to both the Government Actuary and to for their thoughtful
and valuable reports. I would also like to thank those who
responded to the call for evidence that informed the independent
report.
As today’s review underlines, this Government are committed to
providing dignity and security in retirement and to delivering
the certainty that people need to plan for later life. It also
highlights the importance of ensuring that we have the best
available evidence before making decisions about the course of
the state pension age that impacts millions of people.
It is thanks to the measures that this Conservative Government
have taken that there are now 200,000 fewer pensioners in
absolute poverty than there were in 2009-10. This year, we are
projected to spend around £117 billion on state pension-related
expenditure. Next month will see the state pension’s biggest ever
increase, and, as a result, the new state pension will surpass
£10,000 a year for the first time.
I want to make sure that the state pension in this country
continues to be the foundation of income in retirement for future
generations, while also being sustainable and fair. I welcome
Baroness Neville-Rolfe’s independent report. It highlights an
important challenge: a growing pensioner-age population and the
affordability and fiscal sustainability of the state pension. It
also looks at how we can balance that with our commitment to
providing fairness between the generations.
As a society, we should celebrate improvements in life
expectancy, which has risen rapidly over the past century and is
projected to continue to increase. Since the first state pension
age review was undertaken in 2017, however, the increase in life
expectancy has slowed. In fact, the rapid rises in life
expectancy seen over the last century have slowed over the past
decade, a trend seen to a varying degree across much of the
developed world. For most people and communities, people alive
today are expected to live longer than their predecessors. Life
expectancy is still projected to improve over time but, compared
with the last review of state pension age, those improvements are
expected to be achieved at a slower rate.
Having had regard to the relevant factors, I agree with the
independent report’s conclusion that the planned rise in the
state pension age from 66 to 67 should occur between 2026 and
2028 and that that rise is appropriate. It has been in
legislation since 2014 and will continue to give certainty to
those planning their retirement.
I have noted the independent report’s recommendations that the
rise from 67 to 68 should take place between 2041 and 2043. That
is four years later than the first independent reviewer, John
Cridland, proposed in 2017—a proposal that the Government
accepted, subject to a further review—but three years ahead of
what is provided for in legislation. However, was not able to take
into account the long-term impact of recent significant external
challenges, including the covid-19 pandemic and global inflation
caused by Putin’s illegal war in Ukraine.
The Government Actuary also notes the challenges of assessing
long-term mortality trends, particularly in the context of the
covid-19 pandemic. He states that,
“relatively minor changes in the mortality assumptions can result
in fairly large changes to the calculated State Pension age
timetable”.
Given the level of uncertainty about the data on life expectancy,
labour markets and the public finances, and the significance of
these decisions on the lives of millions of people, I am mindful
that a different decision might be more appropriate once those
factors are clearer.
I therefore plan for a further review to be undertaken within two
years of the next Parliament to consider the rise to age 68
again. That will ensure that the Government are able to consider
the latest information, including life expectancy and population
projections that reflect the findings of the 2021 census data,
the latest demographic trends and the current economic situation.
We will also be able to consider the impact on the labour market
of the measures we have announced to increase workforce
participation and of any other relevant factors.
The current rules for the rise from 67 to 68 therefore remain
appropriate and the Government do not intend to change the
existing legislation prior to the conclusion of the next review.
All options that meet the 10-year notice period will be in scope
at the next review. The Government remain committed to the
principle of 10 years’ notice of changes to state pension age and
will ensure that any legislation can be brought forward in a
timely manner.
The approach I am setting out today is a responsible and
reasonable one—one that continues to provide certainty for those
planning for retirement, while ensuring that we take the time to
get this right for the longer term so that the state pension can
continue to provide security in retirement and is sustainable and
fair across the generations.
Madam Deputy Speaker ( )
I call the shadow Secretary of State.
12.13pm
(Leicester South)
(Lab/Co-op)
I thank the Secretary of State for advance sight of his statement
and thank and the Government
Actuary for their reports.
The Opposition agree that it is not the right time to accelerate
a rise in the state pension age, although I note that five years
or so ago the then Secretary of State announced that it was
explicit Government policy to bring forward the increase in the
state pension age to 68 between 2037 and 2039. When objections
were raised on the grounds of life expectancy trends, the
Government said that such objections were irresponsible and
reckless. They told us that bringing forward an increase was
necessary for the long-term sustainability of the public
finances. Now it turns out that, with a general election only a
year or so away and the Government trailing so badly in the
polls, abandoning the accelerated rise in the state pension age
is not so reckless and irresponsible after all.
Can the Secretary of State confirm whether the review he has
announced will still consider bringing forward an increase in the
state retirement age to 2037? Does that remain the Government’s
policy ambition, or is that now abandoned?
The Secretary of State cites life expectancy trends. It is
certainly true that our trends were hit hard by the pandemic, but
that is because life expectancy improvements were slowing before
the pandemic. The life expectancy gap between the richest and
poorest communities was widening before the pandemic,
and—disgracefully and shamefully—in around one in five of the
poorest areas for women and one in nine of the poorest areas for
men, life expectancy went backwards from 2014 to 2019. He should
have acknowledged that today.
The ongoing stalling of life expectancy is out of kilter with
many of our European competitors. It is much more dramatic and it
means that, in a city such as Manchester, Middlesbrough or
Liverpool or a town such as Blackpool, life expectancy for men is
nine to 10 years lower and for women eight years lower than in
the wealthiest parts of Chelsea or Westminster. In Glasgow, as
The Sunday Post recently warned, one in four men will die before
their 65th birthday. That is a quite shameful record.
Why do the Government think, after 13 years, life expectancy
trends have become so dismal in the United Kingdom? It is not
just because so many more people are waiting for treatment in the
NHS, or cannot access health check-ups for blood pressure,
cardiovascular disease or cancers. It is not simply because
smoking cessation services have been so cut under this
Government. It is not simply because mental health services are
overwhelmed, addiction services have been cut back and we are now
seeing the phenomena of deaths of despair in the UK. It is not
simply because social care provision has been so savaged. It is
also because poverty makes people ill quicker and it means people
die sooner.
After 13 years, wages are stagnant and jobs insecure. Too much
housing in the private rented sector is damp and squalid. Today,
there are 400,000 more pensioners in relative poverty, 1 million
more children in poverty and half a million children destitute,
without a bed to sleep in tonight or a hot dinner in their
stomach, after 13 years of the Conservatives.
Today’s announcement that the Government are not going ahead with
accelerating the state pension age rise is welcome, and it is the
right decision, but it is the clearest admission yet that a
rising tide of poverty is dragging life expectancy down for so
many. Life expectancy that is stalling—even going backwards in
some of the poorest communities—is a damning indictment of 13
years of failure, which the Minister should have acknowledged and
apologised for today.
I am glad that the right hon. Gentleman has broadly welcomed the
decisions that I set out in my statement. I will address a couple
of the points he raises. On poverty and, as we are particularly
focused on pensioners, pensioner poverty, the situation has
improved. The poverty situation has improved right across the
board since 2009-10, with some dramatic reductions to both
absolute and relative poverty levels across that period, not
least because of the policies pursued by this Government. He
suggests we are something of an outlier in terms of the
flattening of the increase in the expectations of length of life
in future. That is simply not the case; as I said earlier, it is
an international phenomenon.
The right hon. Gentleman raised a couple of questions I would
like to address. First, he asked whether a move of the rise of
the pension age to 68 was possible, along the lines of the
Cridland recommendations of 2037 to 2039. Given we have made a
commitment to a 10-year notice period, that would suggest that,
if the next review —and I say if, because that is for others to
decide in the course of time—were in, say, 2026, that would
indeed make those dates possible. Of course, it would not
preclude decisions being taken for dates further out than 2037 to
2039.
Secondly, the right hon. Gentleman asks what our policy is at the
moment. We are very clear what our policy is: the current
legislative position is appropriate, but there will be a review
within the first two years of the next Parliament.
(North East Somerset)
(Con)
Unlike the Labour party, I do not welcome this decision. From the
1940s to today, life expectancy from retirement has increased by
seven years, which would indicate a retirement age of 72 rather
than of 67 or 68. The benefit of long-term decision making is
that it gives everybody the chance to plan well in advance.
Delaying the decision is a decision in itself, and it is not
exactly a sign of strength.
I hear what my right hon. Friend says. As I set out in my
statement, there are a number of uncertainties, some of which are
in the fiscal sphere. In fact, if he reads pages 13 and 14 of the
Office for Budget Responsibility economic and fiscal outlook, he
will see what the OBR has to say about the uncertainty of the
public finances around labour supply, energy prices and, indeed,
interest rates. For that reason, among others, I believe it
appropriate to wait until we are more certain about what the
future holds.
Madam Deputy Speaker ( )
I call the SNP spokesperson.
(Kilmarnock and Loudoun)
(SNP)
I thank the Secretary of State for advance sight of his
statement. The Work and Pensions Committee called on the
Government to publish the reports by and the Government
Actuary, which have been used to inform the review of the state
pension age, and it is regrettable that that did not happen in
good time. I am sure that many of us are left wondering why the
Government did not publish those reports earlier to allow proper
parliamentary scrutiny and a more informed decision. Is it not
the case that this is a political decision because this
Government, who are at the end of their days, do not want another
fight before the next general election?
We in the SNP oppose further increases to the state pension age.
We are glad that life expectancy is now finally being factored
into the wider consideration of what is an appropriate state
pension. The reality is that Tory austerity, followed by covid,
has caused an overall reduction in average life expectancy
figures. The UK has one of the worst state pensions in western
Europe; too many pensioners in Scotland live in poverty, which is
a damning indictment in what is supposed to be the sixth largest
economy on the planet. Is the Secretary of State not embarrassed
that pensioners on these islands have to choose between heating
and eating in 21st century Britain? He talks about a reduction in
poverty rates, but that is because the Government are using
lagged data to analyse poverty rates and ignoring the cost of
living crisis that is on us now. With 7 million households in
fuel poverty, the Government cannot talk about poverty rates
decreasing.
There is evidence that increasing the state pension age from 65
to 66 caused absolute poverty rates to rise. Has the Secretary of
State seen the Institute for Fiscal Studies report on that and,
if so, has it been part of the decision-making process? What
lessons has he learned from the Women Against State Pension
Inequality Campaign about raising the state pension age for women
born in the ’50s? When will they see some compensation?
Finally, we look forward to an independent Scotland being the
best place to grow old in prosperity, not in poverty with a
Westminster Government we did not vote for.
The hon. Gentleman raises several points. First, on the
publication of Baroness Neville-Rolfe’s report, I have always
been clear that we would publish that at or around the time that
my report of the review was released, and that is precisely what
we have done, including by giving advance sight of my report and
her report to the Opposition.
I believe that the hon. Gentleman’s remarks about pensioner
poverty are misplaced. Pensioner poverty has fallen since
2009-10, as has poverty across other cohorts of the economy. He
will, of course, be aware of the huge amount that this Government
have been doing by way of intervention to ensure that we support
low-income households, and pensioners up and down this
country—many millions of them—with billions of pounds of targeted
transfer payments, which will be going out over the coming
months.
Finally, the hon. Gentleman mentioned the WASPI women. He will
know that I am not able to comment on that matter as it is
subject to a current inquiry by the parliamentary ombudsman.
(Wokingham) (Con)
What would be the saving were the Government to raise the age by
one year to 68?
That is a beautiful question because it is precise; it requires
an answer that one cannot duck. I will write to my right hon.
Friend with that information.
Madam Deputy Speaker ( )
I call the Chair of the Work and Pensions Committee.
Sir (East Ham) (Lab)
I am grateful for early sight of the statement. I understand why
the Secretary of State has chosen to defer the key decision. Like
John Cridland’s independent review six years ago, Baroness
Neville-Rolfe’s report should have been published soon after the
Department received it six months ago, rather than kept
needlessly under wraps until today. John Cridland proposed early
access to pension credit. Will the Secretary of State consider
leaving access to pension credit at age 66 when the state pension
age rises to 67 in three years’ time?
The right hon. Gentleman raises the issue of when Baroness
Neville-Rolfe’s report was published. We had a fairly detailed
discussion about that when I appeared before his Committee
yesterday, so he knows my arguments around that. It is something
that I certainly would not rule out for future reviews as a
perfectly reasonable practice, but he knows the reasons it did
not happen on this occasion. In terms of early access to pension
credit, that is not something that the Government are currently
planning—nor was it something that previous Governments planned
to do at any stage—but of course, as with all matters around
pensions, we will keep that under review.
(Dumfriesshire, Clydesdale
and Tweeddale) (Con)
Is my right hon. Friend aware of the various spurious claims that
have been made by those who support Scottish independence not
just about the amount that would be paid in future for pensions
but about who would pay it? Does he agree that the best way to
achieve long-term security for Scottish pensioners is for
Scotland to remain at the heart of the United Kingdom?
My right hon. Friend is absolutely right. What matters for
sustaining a fair and just pension system is a strong economy. We
are stronger together, and if we continue to work together—all
the nations of the United Kingdom—we can continue to afford
decent pensions for our pensioners.
(North East Fife)
(LD)
The statement has provided clarity on when somebody will receive
their state pension—the age of 67—but we also need to focus on
what people will receive. The Government’s response to the Future
Pension Centre backlogs, and people’s absolute inability to get
through for advice on whether to top up their national insurance
credits before the 5 April deadline, was just to move the
deadline back by four months. That remains woefully inadequate,
and it is clear that that will have to be extended again. Will
the Secretary of State commit to extending the deadline to April
2025, as I asked for in the first place?
The hon. Lady raises an important point. As she acknowledges,
there has been an extension to the deadline, and the reasons for
that were in the very point she made about waiting times and so
on. We are keeping that under review—I can say no more than
that—and we are also increasing the amount of resources going
into telephony to resolve the issues.
(North Devon) (Con)
Does my right hon. Friend agree that there are real complexities
in understanding life expectancy? From listening to the right
hon. Member for Leicester South (), one would think that it
was very easy to understand. The Secretary of State is my
constituency neighbour, and the difference in life expectancy
between the north and south of our county is over 10 years, with
the lowest being in my patch—it is incredibly complex. Does he
agree that setting the state pension age is also a complex
process, and that it should be set through data-led decision
making rather than political point scoring by the Opposition?
I agree with my hon. Friend and neighbour. She is absolutely
right that we need to use the best possible data that we have,
which is precisely why we have taken the decision that we have,
and I am pleased that the Opposition have welcomed it.
(Birmingham, Selly Oak)
(Lab)
I am sure that it is always a relief for a member of this
Government to postpone an unpopular decision, especially in the
light of what we have seen in France. Like the right hon. Member
for Wokingham (), I am curious about the
likely impact on Treasury calculations and whether it has been
factored into recent projections.
The hon. Gentleman will know that fiscal sustainability is one of
the key issues that we examine in coming to these conclusions and
in the work carried out by the independent assessor of these
matters. If he has further specific questions about the impact of
one particular set of decisions on the fiscal outlook over and
above any other, I am happy to discuss those with him outside the
Chamber.
(Harrow East) (Con)
I warmly welcome my right hon. Friend’s announcement, because we
are trying to encourage people to save for their old age and
retirement, and it is important that people get as much notice as
possible. However, there is a dilemma right now. One of my
constituents contacted me to say that she had been saving £1,500
a month for her retirement, which was fixed for September 2022
when she was 67, but by the time she came to realise her pension,
it had dropped by £25,000, so she was no longer able to retire.
Worse still, she wanted to replace her car so that she could be
compliant with the ultra low emission zone because of the Mayor
of London’s ULEZ extension, but she can no longer afford to do
so.
My hon. Friend has landed a very important point, as I think he
knows, and I will leave it there.
(East Dunbartonshire)
(SNP)
Some 31% of pre-state pension age households have no savings at
all. Will the Government finally establish an independent
pensions and savings commission to ensure that pension policies
are fit for purpose, and if not, why not?
I have already identified that we have been bearing down on
pensioner poverty. We have stuck with our manifesto commitment to
the triple lock, which has seen pensions rise to historically
high levels. This is the party that stands firmly behind
pensioners.
(Blackpool South) (Con)
Blackpool has the lowest life expectancy in England, with men on
average living five years less than the national average.
Shockingly, in some wards in my constituency, male life
expectancy is 13 years lower than the national average. So that
people in all parts of the UK can enjoy a broadly similar
retirement period and the state pension remains fair for all,
does the Secretary of State agree that we must redouble our
efforts to reduce such large inequalities in health across this
country?
My hon. Friend is right, and that is why the Government are
majoring so hard on the levelling-up agenda. He is right to point
to the different life expectancies between regions and, indeed,
within regions; there are sometimes stark differences between
cities and towns. That is the kind of element that will need to
be looked at again when the next review occurs.
(Southend West) (Con)
My right hon. Friend knows well that pensioners are much more
susceptible to rises in the cost of living because they are often
on fixed incomes. On behalf of the more than 18,000 pensioners in
Southend West, I simply thank my right hon. Friend and this
Government for delivering the biggest ever increase in the state
pension, which is going up by over 10% in just a few days’
time.
I thank my hon. Friend for that observation. She is quite right:
we have stood by our pensioners. There will be a further £300
cost of living payment to pensioners alongside the winter fuel
allowance. We are encouraging as many pensioners as possible who
qualify to apply for pension credit, which is worth £3,500 on
average. That, in turn, passports pensioners on to £900 of
payments in three instalments over the coming year.
(North Ayrshire and Arran)
(SNP)
People in France are taking to the streets to protest against
proposals to raise the state pension age to 64, yet in the UK
people are expected to simply accept, despite today’s
announcement, that the pension age should continue to rise,
perhaps even to 70 or older by the mid-2050s. Given the poverty
into which women born in the 1950s were thrown when their pension
age was raised with little or no notice, and the fact that the
Joseph Rowntree Foundation has warned of a “pensioner poverty
time bomb”, can the Secretary of State explain what consideration
is given to rising levels of pensioner poverty—it is currently at
2.1 million, although he is seeking to deny that—when decisions
are made about raising the state pension age?
I set out in my previous response a number of the measures the
Government have taken to make sure we look after our pensioners.
I have also made it clear that since 2009-10, pensioner poverty
has decreased.
(Strangford) (DUP)
I thank the Secretary of State for his statement. A number of
people in my constituency work in the construction sector and
manual labour. To expect someone in their late 60s to work in a
manual labour job is simply impractical and unworkable, so I
support the Government’s temporary stay of execution on this
increase, so that people can retire when they have some semblance
of health and strength to enjoy life. However, this again
underlines the unfair treatment of the WASPI women born in the
’50s. I noted the Secretary of State’s response on that issue,
but it would be unfair of me not to make that comment on behalf
of the many constituents who have contacted me. May I gently ask
him to act on their behalf, to ensure that there is fairness and
parity?
As the hon. Gentleman recognised, I am not in a position to
comment on the matter he raised, as it is before the ombudsman at
the moment, but his comments will have been heard.
Mr Deputy Speaker ( )
I thank the Minister for his statement and for responding to
questions for just short of half an hour.
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