State Retirement Pensions: Age
(asked on 7th March 2016) - View Source
Question to the Department for Work and Pensions:
To ask the Secretary of State for Work and Pensions, what assessment his Department has made of the effect of raising the state pension age on income inequality between men and women of the same age.
The average woman reaching State Pension age last year (2015) gets a higher state pension income over her lifetime than an average woman who reached State Pension age at any point before her – despite the equalisation of State Pension age. Also, over a lifetime, the average woman who reached State Pension age last year will receive more than the average man. This is consistent with the trend going forward, with, for those reaching State Pension age between 2016 and 2060, women receiving 10 per cent more new State Pension lifetime income than men.
Further information on the impacts of the new State Pension can be found at:
Women live longer than men, on average, and as a consequence spend a longer proportion of their lives above State Pension age. Without equalisation, in 2010, women would spend on average 41 per cent of their lives in retirement, compared to men at 31 per cent. Even after equalising women’s State Pension age with men’s, women will spend on average around two years more in receipt of their state pension because of their longer life expectancy. Women reaching 65 in 2018 are expected to live until 88.9 years, whilst the figure for men is 86.7 years.
The new State Pension is being introduced for those who reach State Pension age from April 2016. In the first ten years after implementation over 650,000 women will benefit from the new State Pension valuation of their National Insurance record, receiving on average £8 a week more in state pension. Around 75 per cent of women (and 70 per cent of men) who reach State Pension age under the new system in the first fifteen years will have a higher value State Pension when compared to the value of the State Pension they would have received under the old system. The new system will bring forward by a decade the point at which women have equivalent State Pension outcomes to men (by the early 2040s instead of the early 2050s).
Independent analysis by the Institute for Fiscal Studies has shown that the rise in women’s State Pension age since 2010 has been accompanied by increases in employment rates for the women affected. For those who are unemployed, or unable to work, working age benefits are still available.