- As State Pension Age rises to 66 with economic meltdown boosting unemployment, there is a strong case to allow early access to State Pensions.
- Many over-60s are unwell, genuinely unable to work, or are caring for others and have no private pension.
- Healthy life expectancy across the country varies by around 20 years, so rising State Pension Age hits these least healthy hardest.
- Those with long National Insurance records, poor health and no prospect of employment cannot receive any State Pension until age 66.
State Pension Age hits 66 on 1st October 2020: Women have been particularly affected by the sharp rise in pension age but there are also many men who will face difficult times as they have to wait longer for their State Pension to start.
Healthy life expectancy varies by nearly 20 years in the UK: The rationale for rising state pension age rests on increases in average life expectancy across the UK. However, the average life expectancy masks an enormous difference between regions, occupations and social groups. The most recent figures show an almost 20-year differential in healthy life expectancy in the UK.
State Pension system makes no allowance for such differentials: Certain regions and occupations have much poorer health and in general the most disadvantaged groups in the population tend to live far shorter lives than others. Currently, the National Insurance pension system does not recognise this.
Most disadvantaged members of society lose out: The most disadvantaged members of society tend to have poorest health. Many had hard manual working lives which has taken its toll on their health. Therefore, using average life expectancy particularly disadvantages such workers, even if they have worked for 50 years or more.
Private pensions allow early access but many disadvantaged groups rely only on State Pensions: The ever-rising State Pension Age is increasingly disadvantaging those people in poor health– especially women – who have little or no private pension to supplement their National Insurance state pension.
Covid-19 has worsened the employment prospects and health of many over-60s: The pandemic has seen many over-60s lose their jobs, damaged their health or forced them into caring for loved ones and they are unlikely to be able to work again. Those without a private pension – especially women – need to take their pension early. But even those with very long National Insurance records (far longer than the 35 years needed for a full State Pension) or who have seriously shortened life expectancy, cannot receive a penny of State Pension until age 66 now. Allowing early access, even at a reduced rate, could offer a lifeline to those who want to benefit from their many years of NI contributions, rather than the unrealistic reliance on out-of-work benefits.
Those who are healthy and wealthy enough can get more State Pension by delaying their state date: The current system favours the healthiest and wealthiest members of society – most of whom are likely to have good private pensions to fall back on if they need to. Those who can afford to wait beyond age 66 or who are physically fit and want to keep working, are able to delay their state date and receive a higher pension. But no allowance is possible for those in the poorest health, with no other income and unable to work, to draw even a reduced amount sooner. I would prefer to see a band of ages whereby those who need it can access their State Pension sooner, subject to minimum contribution requirements and other assessments.
This is an issue of social justice, as well as social support: As the ;impact of the pandemic on the labour market grows and the nation’s health deteriorates, ensuring the system works more fairly for the least advantaged is worth consideration. There has long been a strong case for considering a more flexible age range for starting State Pension payments and the pandemic has made this case even stronger. It could help many women and many who are seriously ill or need to care for loved ones and I do hope the Government will give this urgent consideration.