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Labour peers eye regional variations for state pension age

Labour peers are pushing for variations in the state pension age based on the type of job people have held and where they live.

Speaking at the second reading of the Pensions Bill in the House of Lords yesterday, Labour members attacked Government moves to increase the pensions age as “one size fits all”.

The Bill, which passed through the Commons, will raise the state pension age from 65 currently to 67 between 2026 and 2028.

It will also create a statutory review of the pension age at least every six years which will consider whether further increases are necessary.

Now:Pensions trustee and Labour peer Lord John Monks says there are “inherent inequalities” between the regions and between manual and professional workers.

He says: “It seems you have won the jackpot if you are a professional worker in Dorset; if you are a manual worker in one of the old industrial areas, you are in trouble.

“Yet it is ‘one size fits all’, and that one size does not fit some, for whom, in the years after retirement, the forecasts are pretty poor.

“I hope these will be considered. Certainly, if the state pension age is to be changed again, I hope that this review will lead to some independent process, to give people confidence in the judgment about retirement ages.”

Pensions Advisory Service board member and Labour peer Baroness Patricia Hollis says it is an “insult” for those with higher life expectancies to call for longer working lives.

She says: “Every year that we raise the state pension age is deeply unfair on those who have had hard lives.

“By raising the state retirement age, we eat into and reduce their few healthy retirement years even further, all to subsidise the pensions of people such as me—the longer lived, healthier, better educated and better off, including those of us in your Lordships’ House. Our single-age retirement policy—one size fits all—is regressive and unfair. “

Labour Lords pensions spokeswoman Baroness Maeve Sherlock agrees with the need for a periodic review but wants an independent cross-party process.

Department of Work and Pensions minister Lord David Freud says increasing life expectancy is putting huge pressure on the pensions system.

He says: “[The review] will ensure the state pension age is examined in an open and transparent way on a regular basis and prevent future Governments from needing to take emergency action.”

Former Labour cabinet minister Lord John Hutton, who also reviewed public sector pensions for the Government, says: “There is no doubt the pressures, both financial and societal, will build up unless we stay ahead of the process of demographic change.”

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Comments

There are 2 comments at the moment, we would love to hear your opinion too.

  1. Pension simplification ahoy!

    How in hell’s name is having to live for 20 years on a pittance in an area with a high cost of living “hitting the jackpot”?

    They seem to be under the impression that a State Pension should work like an annuity. It isn’t, it’s a state benefit. It’s not supposed to be fair, it’s supposed to keep pensioners from starvation. The only way to get the State Pension to work as an annuity would be to go the whole way and pay National Insurance contributions into a pot for each worker which is then used to buy their State Pension. Only then could you sensibly take into account their longevity.

    As NI contributions can’t be paid into a fund for future State Pensions because they are being used to pay today’s State Pensions, good luck with that.

  2. The level of complexity and room for gaming the system that such a proposal would unleash boggles the mind.

    No, one size fits all is not fair and it is one of many trade offs a taxpayer makes when living in a country with a welfare state.

    Demography has the potential to slowly strangle the economy, one only has to look at Italy for the consequences of not reining in spending on the non productive population.

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