Question to the Department for Work and Pensions:

To ask the Secretary of State for Work and Pensions, for what reasons his Department plans to spend less on pensions and pensioner benefits in 2018-19 than in 2017-18.

In nominal terms, we expect to spend more in 2018/19 than in 2017/18 (£120,084M in 2017/18 compared with £121,870M in 2018/19). However, when adjusted for inflation (i.e. in real-terms), the Department will be spending slightly less on pensioner benefits in 2018/19 than in 2017/18 (2016/17 prices: £118,365M in 2017/18 compared with £117,632M in 2018/19 – 0.6% less).

This is because of rising State Pension age for women during that period which means that fewer women are moving from working age to become eligible for State Pension and other pensioner benefits. This also affects some men, as some benefits, such as Pension Credit, have eligibility age linked to female State Pension age. As a result, the number of people claiming pensioner benefits is forecast to be slightly lower in 2018/19 compared to 2017/18.

Once the rise in State Pension age to 66 is complete in October 2020, increasing longevity means that the number people over State Pension age is projected to grow, resulting in a corresponding growth in forecast real-terms pensioner benefit expenditure.

The Pension Act 2014, section 27, commits the Government to a structured review of State Pension age every 6 years to ensure that the costs of increasing longevity are shared fairly between the generations, and to provide greater clarity around how State Pension age will change in the future. The first Government review of State Pension age is underway and will be published before 7 May 2017.