State Pension Age: Women

Julian Knight Excerpts

Wednesday 29th November 2017 Commons Chamber

[The Parliamentary Under-Secretary of State for Work and Pensions (Guy Opperman)]

Since world war two, we have seen a dramatic change in life expectancy. We are living longer, staying healthier, fighting diseases that previously would have killed us and leading a more active lifestyle, regardless of age. Faced with demographic pressures and increased life expectancy and costs, successive Governments have acted. We must be realistic about the demographic and fiscal challenge that these changes create for us as a society.

Taking forward-looking action is critical to protecting the long-term sustainability of the state pension not only for today’s taxpayers, but for future generations. In July, the Government published their first review of the state pension age, which sets out a coherent strategy targeted at strengthening and sustaining the UK state pension system for many decades to come. It accepts the key recommendations of John Cridland’s independent review, which consulted a variety of people and organisations, including the Scottish National party—the bringing forward to 2037 to 2039 of the increase in state pension age from 67 to 68.

[Julian Knight (Solihull) (Con)]

Will the Minister explain to the House the potential debt impact on future generations of spending up to £39 billion reverting to the 1995 timetable, as well as of Labour’s plan to freeze any increases in the state pension age, which would cost hundreds of billions?

[Guy Opperman]

I am grateful to my hon. Friend for his intervention. I recognise that he has more than 25 years’ experience of working in the pensions industry through his previous journalistic work. The reality is that if the Pensions Acts 1995 and 2011 were to be revoked, it would cost well in excess of £70 billion. If we were to follow the path set out in the Labour party manifesto, which would keep the state pension age at 66, it would cost approximately £250 billion compared with the itinerary set out by the independent review commissioned by the Government and produced by John Cridland.

The Cridland review is very clear on that point. It says:

“In 1917 King George V sent the first telegrams to those celebrating their 100th birthday. 24 were sent that year. In 2016 around 6,000 people will have received a card from Her Majesty the Queen. In 2050, we expect over 56,000 people to reach this milestone.

Three factors are at play here: a growing population; an ageing population as the Baby Boomers retire; and an unprecedented increase in life expectancy. A baby girl born in 2017 can expect to live to be 94 years and a boy to be 91. By 2047 it could well be 98 and 95 respectively…The world of the Third Age is now a very different one, in which those lucky enough to get the State Pension will on average spend almost a third of their adult life in retirement, a proportion never before reached.”

It was clear that the Government had to act.