Why raising the state pension age is no pensions panacea (Nigel Stanley, Trades Union Congress)
The easy way to give people better pensions is to raise the pension age, and distribute the same expenditure among fewer pensioners.
But it is far from progressive - and worse - is a sleight of hand. You can redefine pensions policy to exclude those people between 65 and the new pension age. But they have not gone away, and immediately pop up as a new labour market and welfare problem.
Raising the pension age in this way benefits longer lived pensioners - who are more likely to be affluent and live in affluent areas. While longevity has increased, the gap in life expectancy has failed to narrow. In 1972 65 year old professional men could expect to live 2.5 years longer than unskilled men, a gap that rose to 4.2 years by 2002. If the pension age were to rise to 70 then professionals lose would lose 27% of their pensionable years, while the unskilled would lose 35%.
In Kensington and Chelsea life expectancy at age 65 is 23.1 years, while in Glasgow it is just 13.8 years. Raising the state pension will redistribute significant sums from Glasgow's poor pensioners to the millionaires rows of the Royal Borough.
The theory is that everyone will work longer, but only a minority of 64 year old men are in employment with 53 per cent economically inactive. 17 per cent are too sick to work and 34 per cent say they have retired - not necessarily because they chose to.
Taking a non-means tested state pension and, possibly, means-tested pensions benefits away from 65 and older people will put more money into the pensions lines of the national accounts. But making them instead reliant on much meaner benefits for the unemployed, and the increasingly draconian regime that treats anyone without a job as a workshy scrounger hardly seems a social advance.
