Rising pension age risks exceeding life expectancy MPs warn over bleak prospects for men in some parts of city
CONSTANT increases to the state pension age mean men in some parts of Birmingham are more likely to die before they become eligible for it, MPs have warned.
The stark conclusion is a result of plans to press ahead with regular generous increases to pensions, they said.
Although it sounds like good news for pensioners, it also means the Government will be forced to continue increasing the official state pension age to pay for it, according to the Commons Work and Pensions Committee.
It means that in certain deprived parts of Birmingham the pension age could eventually be higher than average life expectancy now.
The committee highlighted a study by think tank the Institute for Fiscal Studies, which found the state pension age is on course to reach 70.5 years by 2060. But life expectancy in parts of Birmingham for men is as low as 70.4 years.
The losers will be some today’s young people, who face having to work longer before they become eligible for a pension, MPs say.
The system of generous pension increases – known as the “triple lock” – means pensions increase every year by the same as average earnings, the consumer price index, or 2.5 per cent, whichever is the highest.
The UK state pension age already due to hit 67 by 2028.
The Work and Pensions Committee warned there was “a trade-off between the uprating of the state pension and the state pension age” of is and urged the Government to scrap the triple lock. Instead, they want the Government to link pensions to earnings, with safeguards to ensure pensions rise if inflation is higher than earnings growth. They said this would save £15 billion a year by 2060. Committee members include Steve McCabe, Labour MP for Birmingham Hall Green. He said: “The problem here is that people are being dishonest about the triple lock. “The government are saying they are going to maintain it but that’s quite clearly not going to happen, so we should have an honest conversation about how to create a fairer system. “At the moment, some people will benefit from the triple lock, but in some parts of Birmingham average life expectancy for men is lower than the pension age is going to be.”
Committee chairman Frank 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 benefitting 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.”