State Pension Age

Question

Asked by

To ask Her Majesty’s Government what consideration they will give to the latest Office for National Statistics’ projections for (1) life expectancy, and (2) healthy life expectancy, when reviewing the state pension age.

The department launched the second review on state pension age in December 2021. It must be published by May 2023, in accordance with Section 27 of the Pensions Act 2014. The review will be informed by two independent reports and will consider a wide range of evidence. This will include consideration of the latest Office for National Statistics projections for life expectancy and healthy life expectancy. Tempting though it is, we must wait for the report to come out before we comment.

I thank the Minister for that response and the point she makes that the ONS projections seem to confirm that life expectancy is no longer increasing. As it is, the people most dependent on a state pension are more likely to have a shorter life expectancy than those with additional pension provision. Many will die before they reach retirement age or will receive their state pension for only a few years. Does the Minister accept that a fair pension scheme must take account of the life expectancy and healthy life expectancy of people in deprived areas—not just a broad average across the board? Can she assure us that the Government’s review of the state pension age will take that into account?

The noble Baroness makes a number of important points. We want a fair pension system, and her points about life expectancy, particularly in some of the poorer areas of the country, are valid. On the review, I know that my noble friend Lady Neville-Rolfe will want input from Members of this House who are concerned and who have expertise, and I encourage the noble Baroness to make sure that those points are made to my noble friend when she carries out her review.

Has my noble friend considered the conclusion of the Office for National Statistics that:

“Over a 20-year period the estimated change in deaths associated with warm or cold temperature was a net decrease of 555,103 … A decrease in deaths from outcomes associated with cold temperature greatly outnumbers deaths associated with warm temperature”?

Is it not good news that climate change has prolonged or saved the lives of more than half a million of our fellow citizens—

Oh!

—a laughable matter to the Liberal Benches over there—and how long does she expect this beneficial effect to continue?

My noble friend has again given us some interesting facts and data. I am afraid that the impact of climate change is way outside my brief, but I am sure everybody notes the points made.

My Lords, the Minister quite rightly referred to the ongoing reviews, but I simply ask, as a matter of logic, that, if the policy is that because people are living longer, retirement age should increase, is it not the necessary corollary that if people are not living as long as previously expected, retirement age should not be increased in the same way?

I will not argue with logic; that would not get me anywhere. On the noble Lord’s point about the state pension age, I know that people are sceptical of government reviews, but I ask all noble Lords to approach it in a positive way, make their points—particularly the one raised by the noble Lord—and get them into the review.

My Lords, around 1.5 million low-paid workers pay a 25% penalty for their pension savings. When will the Government publish the outcome of their call for evidence on pensions tax administration to enable low-paid workers, who are typically women, to receive pensions tax relief on their contributions?

Many noble Lords have made this point, including the noble Baroness, Lady Drake, and my noble friend Lady Altmann. The truth is that I do not know when they will do it, but I will go back and find out, and will write to the noble Baroness.

My Lords, women are disproportionately affected by pensioner poverty. What are the Government doing to support and help them?

Since 1994-95, rates of female pensioners in poverty, by all measures, have fallen by a larger amount than rates of male pensioners in poverty over the same period. The proportion of pensioners in absolute poverty, after housing costs, has halved since 2002-03. Pension credit is the safety net—I know that will open the floodgates for a raft of other questions—and we must make sure that as many people as possible apply for that benefit.

My Lords, I cannot let that go: relative poverty among pensioners is on the rise again, having fallen considerably for years. However, controversially, I will come back to the Question. The latest ONS tables show that life expectancy at birth in the UK is 79 for men and 83 for women. But life expectancy is lower in Wales and Northern Ireland, and especially Scotland, than it is in England. What are the Government doing to engage with the devolved Administrations, and how might pension policy take account of that?

I hope that, during the review, the devolved Administrations will be consulted. I will certainly go back to the department and speak to the Secretary of State to make sure that that is included in the review. The review will then report, and the noble Baroness will get the answers that she is looking for.

My Lords, I am delighted that my noble friend Lady Neville-Rolfe will be leading an independent inquiry. Can my noble friend the Minister assure the House that some flexibility in state pension age will be considered for those who are not healthy and wealthy enough to wait for the ever-rising state pension age? With a significant, 20-year difference in healthy life expectancy across the country, perhaps very long national insurance records might be considered for early access to the state pension.

As I have said many times, I cannot give any guarantees, but I am absolutely sure that the points my noble friend raises about flexibility and age will be included in the review. I urge her to take part in that consultation.

My Lords, poorer people tend to die at a younger age than richer people. Each increase in the state pension age effectively results in a wealth transfer from the poor to the rich, who will receive the pension for many more years. Can the Minister tell the House why the Government have pursued pension policies that penalise the poor and transfer wealth to the rich? Why this reverse socialism for the rich?

I doubt I will be able to convince the noble Lord, but nobody wants pensioners to be in poverty and nobody wants to run a book on transferring wealth from one place to the other. The noble Lord raises a valid point. I know I am repeating myself, but it is one that I expect will be in the review; knowing how much knowledge the noble Lord has, especially on how to pay for these things, I look for him to have input into the review.

My Lords, in the last two years, life expectancy has been below the expectancy of the industry. If that continues to be the case, does it mean that slight pension increases could be afforded?

I imagine that, if things go as my noble friend has just said, that is a possibility, but I am not able to confirm it. Again, I urge my noble friend, who has a raft of experience in this field, to get his point into the review.

My Lords—

I am grateful to the noble Lord and declare my interests as set out in the register. Referring to the points made by the noble Lord, Lord Lilley, does the Minister agree that the interaction between health and climate change really warrants a more sophisticated analysis of all the factors involved, rather than the assertions made by the noble Lord in his intervention?

I can assure the House that my noble friend Lady Neville-Rolfe will pay due attention to the seriousness of the interaction between the points the noble Baroness has raised. I have no doubt that will happen.