From Ros Altmann:economist and pensions,
    investment and retirement policy expert

  • pensionsandsavings.com

    Cridland State Pension Age Review

    Cridland State Pension Age Review

    23 March 2017

    Cridland Report emphasises importance of working longer but shies away from allowing early State Pension for those who can’t

    Summary of my views:

    • Yes it is important to help people work longer, especially after Brexit
    • Yes Government should end the triple lock which doesn’t protect oldest and poorest pensioners properly anyway
    • Yes we must tell people about any increases to their State Pension age
    • Yes adults caring for elderly relatives need more help
    •  BUT I would go further in recognising differential work history and life expectancy by allowing early access
    • Current system helps those who are healthy and wealthy enough to wait longer for State Pension, while giving nothing to those who genuinely cannot keep working


    • People under age 45 will get no state pension until age 68.
    • Just increasing state pension age prolongs disadvantage for occupations and regions with known lower life expectancy.
    • I hope this review will help pave the way to end the increasingly unfair triple lock.
    Cridland is right to focus on helping people work longer, especially part time: I’m pleased to see the Review suggesting reforms such as later life training, mid-life career reviews and protection for carers, which I recommended as Business Champion for Older Workers. Retirement can be a process rather than an event, with people cutting down gradually rather than suddenly stopping and more help for people to stay in the labour market longer is important.

    Brexit makes later working even more important:  We should not force people to stay on and should recognise the wide variations in life expectancy across occupations and UK regions, but as we leave the EU and immigration falls, it makes sense to use older workers’ talents and lifelong experience more.  This can boost the economy and their own future income.

    But many people genuinely cannot keep working and State Pension currently doesn’t make allowance for this:  Cridland highlights the vast differences in life expectancy across the UK – more than 15 years differential.  Just as the Review recommends more flexibility is required by employers to facilitate part-time work for older people and help for the increasing numbers of workers who will need to care for elderly relatives, I believe more flexibility is also needed in the State Pension system.

    Disappointing that Review decides against early access: People with shorter than average life expectancy generally still pay around a quarter of their salary in National Insurance. They may have worked for 50 years or more but may die before being eligible for any state pension – or may receive very little. This seems inequitable and their lower life expectancy is not recognised by our National Insurance rules. Normal insurance would usually charge lower premiums to such people but that does not happen. Therefore allowing early access could compensate for this even if for a reduced pension.

    Current system only helps those who are healthy and wealthy enough to work longer:  If someone can work beyond state pension age, they can get a much larger pension but there is no help for people to get their state pension earlier if, for example, they started work exceptionally young, perhaps in tough industrial jobs, and genuinely cannot keep going till nearly 70.  Cridland recommends some means-tested help just one year before State Pension age but I think moving away from just one ever-increasing age, would be more socially equitable.  A band of starting ages, such as between 65 and 69 with adjusted payments would be fairer.

    Spurious accuracy of ensuring receipt of State Pension for ‘up to one third of adult life’: The aim of the Review was meant to ensure people spent ‘up to one third of adult life’ receiving State Pension.  The Government Actuary’s Department figures vividly highlight the difficulties of such a vague target.  Tiny changes in average life expectancy are shown to imply vast differences in timing of state pension age increases.  Between 2012 and 2014, life expectancy fell a little, but that implied a 5-year change in the state pension age timetable.  It does seem that targeting 33.3% of ‘adult life’ or 32% of ‘adult life’ is misleading, given the sensitivity to tiny changes in mortality and huge differences in life expectancy across the population.  A range of ages would surely better cater for individual differences and allow some flexibility.

    Problems for WASPI women show dangers of raising state pension age – lessons need to be learned: The Government also needs to learn from the women’s state pension age fiasco that it is essential to ensure people know about any state pension age changes in good time to prepare. Many older women are facing serious hardship as a result of Government failure to communicate with them and there has been no recognition of the damage this has caused so far.

    Triple lock should be scrapped – it is a political construct that is increasingly unfair and leaves out oldest and poorest pensioners: I agree with Cridland that the triple lock should be abandoned after 2020. The triple lock is a political construct which purports to offer great protection while increasingly disadvantaging the oldest and poorest pensioners. The lock protects around £160 a week for the newest pensioners but only around £120 a week for older ones and it does not protect the Pension Credit at all which the poorest pensioners must rely on.  The arbitrary 2.5% figure has no economic or social rationale. Cridland suggests linking the State Pension just to earnings but I would like to see some protection against inflation too if that is rising faster.  There is a clear tradeoff between more generous pension increases and raising state pension age.  Having the triple lock in place also puts more upward pressure on the state pension age which itself disadvantages poorer areas of the country and those in heavy manual occupations. So the unfairness and extra cost of the triple lock make it ripe for reform.


    2 thoughts on “Cridland State Pension Age Review

    1. Thank you, Ros, for describing the implementation of the raising of the SPA for the WASPI (1950s) women as a ‘fiasco’. Not ensuring the women involved had adequate notice of the changes to come was, to my mind, a catastrophic disaster which has devastated the lives of so many women. Thousands of the women are losing out on almost £50,000 in pension payments (a contribution based entitlement, not a benefit, many having paid upwards of 40 years NI). The WASPI women are often told ‘it was all over the media at the time’, which is disingenuous given that subsequent government research suggested a lack of awareness amongst the target population. FIO requests revealed women were not notified until 14 years after the 1995 Act, and WASPI supporters are still coming across women who are unaware. Even The Times, in 1993, ran a front page announcement that the SPA rise would be IN 2020 not BY 2020, which would lead a woman born in the 1950s to believe the increase did not affect her.
      In addition, the timetable of the increases is a particularly unfair shambles. In what world is a 2 month increase for one 1950s woman and a 6 year hike for another an incremental and fair increase.
      Many of these women started work at 15 or 16 years, were not allowed to join company pension schemes, did not enjoy equal pay, took time out to raise their children (with no free child care) so will, in all likelihood, have to live on a meagre pension, when they finally get it, and many are now caring for elderly parents and grandchildren whilst juggling work commitments. The media hyped myth of the baby boomers currently living the life of Riley is incredibly insulting and inaccurate.
      Thank you, again, for highlighting the truth and also for attending the WASPI demo on Budget day.

    2. Whilst the government are reviewing State Pension Age they need to address two other aspects in this matter. Firstly the compulsory equalisation in GMP in Co tracked out company pension schemes. As the SPA for GMP is still set at 60 for women but 65 for men it means women are receiving a lesser pension increase for 5 consecutive years in comparison to a man.Sexual discrimination. Companies will not change this on a voulutary or morally correct basis..I know I’ve contacted the Trustees of my Pension scheme & received ” it’s not our fault it’s government legislation” letter. Secondly State Deduction or Clawback applied in some Company Pension schemes. They are using State Pension to propose up their company pension when they should be seperate. It’s based on number of years worked for a company and state pension value so longest serving lowest paid employees are affected the most. Both practices need scrapping. Companies who have provided a pension scheme should not be using the State Pension and benefits in this manner. The companies need to pay up!

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