Leaving State Pension Age alone for now is the right decision - Ros Altmann

Of course there is pressure on the public purse and the ageing population will inevitably mean higher pension spending, but the State Pension is a fundamental part of our country’s social insurance arrangements and millions of citizens are already struggling in poverty after the rise in State Pension Age to 66, with the increase to 67 starting in just three years’ time.

With doubts having been raised about the trajectory of life expectancy forecasts, as well as the evidence of huge differentials across the country in healthy life expectancy, I do not believe it is safe to accelerate the rise in State Pension Age unless it also introduces more flexibility to the starting age – in order to recognise that less than half the population, according to official statistics, are still in good health in their mid-sixties.

Cutting costs would be the only reason to press ahead with accelerating the State Pension Age timetable and I am pleased to see this factor has not overridden social concerns. There is more than the usual degree of uncertainty about trends in life expectancy. Since 2019, the expected increases have not materialised and, indeed, for those already in their fifties, life expectancy has fallen. It is, therefore, right that the Government waits for more evidence.

The trends are of course partly impacted by the pandemic’s effect on older people, but the ongoing NHS backlogs and crisis in elderly care may prevent a sudden resumption of life expectancy rises – as well as leaving those in their fifties or sixties in poor health for longer.

The costs of long-term state pension provision may already be overestimated and it would be right to wait and see what impact the post-pandemic period has on overall life expectancy – and indeed healthy life expectancy - before pressing ahead with changes. Rather than ploughing ahead with plans to bring forward the rise to 68 to the 2030s instead of the 2040s, there are other ways of controlling State Pension spending, which seem better suited to the reality of our population. Having a more individualised approach would recognise the reality of the UK population and work-ability. Allowing some flexibility for state pension starting date, to recognise adding additional factors such as differing health across the UK, or factoring the length of each person’s National Insurance record into the equation, would contribute to a fairer system, rather than pushing those who are genuinely too ill to work into poverty while waiting for any state pension to which they may have even contributed for over 50 years.

Tying Pension Credit starting age to State Pension Age could also be reconsidered. By constantly increasing the state pension starting age and increasing Pension Credit starting age in line with this too, many of our citizens in poor health are left in poverty, even if they have contributed for 40 or 50 years to National Insurance.

Baroness Ros Altmann is a British life peer and former pensions minister.