“Labour’s announcement says all the right things to the generations who were dismayed by the increase to the state pension age. However, their argument has holes and they have yet to outline costed workable proposals. Until they do their words should be taken with a hefty pinch of salt.
“The state pension age changes recently announced will affect around six million people, those currently aged 39-47, and will delay their retirement by one year. Clearly that specific change does not affect 37 million people.*
“Labour have suggested they might consider a flexible state pension age, which is a worthwhile proposal and deserves serious consideration. A flexible state pension age could allow people with lower life expectancy to take a smaller state pension at a younger age, giving some flexibility to people that cannot work until age 68. However, government will need to make it administratively viable. The recent SPA review had considered such a proposal, but government decided it was too complex.
“If Labour commit to keeping the state pension age at 66 and also hold the triple lock in place, which they promised in their manifesto, then pension costs will continue to rise at an unsustainable level.
“According to John Cridland’s review of the SPA, spending projections show that between now and 2036/7 annual State Pension spending is set to rise by an extra 1% of GDP, from 5.2% in 2016/7 to 6.2% in 2036/7. This is equivalent to an increase in taxation of £725 per household per year. While keeping the state pension age where it is would be great news to millions, the onus is still on Labour to prove how it would make such a decision possible.
“There is a lot of mud-slinging over state pension age, and yet every party recognises the a long-term sustainable policy solution is required. It is the perfect example of a policy decision that needs cross-party consensus. State pension policy affects everyone, both retired age people and those still in work and we deserve better than perpetual bickering between politicians on such a key issue.”
*Prior to that state pension age changes had remained fixed from the mid 1900’s until 1995, when government legislated to equalise retirement age at 65 for men and women. In 2007 the Labour government legislated for increasing the state pension age to 66 by the mid 2024-26. Since then the coalition and conservative governments have both legislated for further state pension age increases.