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DWP review into the state pension age from the Labour Party government will look at linking it to life expectancy.
DWP review into the state pension age from the Labour Party government will look at linking it to life expectancy.
A s tate pension age rule change could “push pensioners into poverty”, it has been warned. A Department for Work and Pensions (DWP) review into the state pension age from the Labour Party government will look at linking it to life expectancy.
DWP minister and Labour Party Cabinet Member Liz Kendall has commissioned Dr Suzy Morrissey to lead a review into the state pension age (SPA). Dr Morrissey will explore the merits of linking the SPA to life expectancy.
Dr Morrissey said she would examine Automatic Adjustment Mechanisms (AAMs) as part of her review. AAMs have been used to link the SPA to life expectancy in different ways in countries such as Estonia, Finland, Greece, Italy, the Netherlands, Denmark, Portugal and Slovakia.
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Catherine Foot, Director of the Standard Life Centre for the Future of Retirement, warned: “Using average life expectancy as the yardstick with which to determine the state pension age inevitably increases inequality and poverty among the pre-retirement population, since it moves the state pension age further away for people who have fallen out of work and are struggling to get back in.
“To mitigate against that increase in inequality, a rising state pension age needs to be combined with active labour market policies that support people to remain in work and out of poverty in the years leading up to accessing their state pension.”
From next year the SPA will start to rise from 66 to 67 before a further planned rise to 68 between 2044 and 2046.
Denmark has tied its official retirement age to life expectancy since 2006. In May, the country’s parliament adopted a law which will see the age rise to 70 by 2040.
Former pensions minister, Sir Steve Webb, told the Telegraph newspaper: “Every time the population projections are updated, this could move the dates for pension age changes by up to a decade, which would make it impossible for people to plan for their retirement finances.”
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