State pension age could be higher than male life expectancy in poor areas, warn MPs
Chancellor Philip Hammond has indicated that while the Government will keep the triple lock for the rest of the current parliament, it will review its future after 2020
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Your support makes all the difference.Maintaining the pensions “triple lock” will mean pushing the state pension age above the average life expectancy for men in poorer parts of the country, MPs have warned.
The Commons Work and Pensions Committee said that pension age would have to rise to 70.5 years-old by 2060 if the current rate of annual increases was to be sustained.
It warned that would exceed the current average male life expectancy in 162 neighbourhoods in Scotland and 26 areas in England.
The committee chairman Frank Field reiterated their call for the “triple lock” – which guarantees the state pension rises by average earnings, the consumer price index, or 2.5 per cent, whichever is the highest – to be scrapped, saying it had “done its job”.
Chancellor Philip Hammond has indicated that while the Government will keep the triple lock for the rest of the current parliament, it will review its future after 2020.
The committee said research it had commissioned from the Institute for Fiscal Studies (IFS) found that if ministers were to index pensions to a “smoothed” earnings link – protecting the value of the pension when inflation outstripped earnings – it would save 0.8 per cent of GDP a year.
That would be a real terms reduction of £15bn at today’s prices, the equivalent to 4p on the basic rate of income tax.
In contrast, the IFS estimated that if expenditure on pensions was to be maintained at current levels of around 6 per cent of GDP with the triple lock still in place ministers would have to put up the state pension age to 70.5 by 2060.
The committee said that would put it above average male life expectancy in 26 neighbourhoods across England, including in Blackpool, Manchester and its surrounds, Teesside, Leicester, east London and the Wirral.
In Scotland, Glasgow alone has 62 neighbourhoods where male life expectancy is below 70.5, with the lowest – the Parkhead West and Barrowfield area – down to just 62.5.
In contrast, male life expectancy in the Westminster area of London – which includes Mayfair and Covent Garden – is 92.9 years.
Mr Field said: “With the triple lock in place the only way state pension expenditure can be made sustainable is to keep raising the state pension age.
“This has the effect of excluding ever more people from the state pension altogether. Such people will disproportionately be from more deprived areas and manual occupations, while those benefiting most will be the relatively prosperous.
“By 2020 the state pension will be at a level where it will provide a decent minimum income for people in retirement to underpin private saving, and any savings they have will be kept on top of, not clawed back from, the state pension.
“The triple lock will have done its job and it will be time therefore to retire it.”
PA
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