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Labour peers moot regional state pension age

Labour peers have called for future increases in the state pension age to be set regionally, based on the type of job a person had and where they live.

05 DECEMBER 2013 | BY JUDITH UGWUMADU
Labour peers have called for future increases in the state pension age to be set regionally, based on the type of job a person had and where they live.
Photo: Shutterstock

Debating the Pensions Bill in the House of Lords this week, a number of Labour peers argued that raising the state pension age as ‘one size fits all’ national level was ‘regressive and unfair’. 

Speaking in the December 3 debate Baroness Hollis said rises to the state pension age were unfair on people who started work earlier and enjoyed fewer years of healthy retirement.

She said" By raising the state retirement age, we eat into and reduce their few healthy retirement years even further, all to subsidise the pensions of people such as me—the longer lived, healthier, better educated and better off, including those of us in your Lordships’ House. Our single-age retirement policy—one size fits all—is regressive and unfair.' 

Lord Monks, a former general secretary of the Trades Union Congress, added: 'There has not been enough time to address some of the inherent inequalities that exist both regionally and between manual and professional workers. It seems that you have won the jackpot if you are a professional worker in Dorset; if you are a manual worker in one of the old industrial areas, you are in trouble.'

Changes in the Bill will increase the state pension age to 67 by 2028, which is not due to increase to 68 until 2046. Within the bill there are provisions for future increases to the state pension age to be linked to life expectancy. Labour wants this changed.

Commenting on the proposal, investment firm Hargreaves Lansdown highlighted that significant regional variations in average life expectancy at age 65 do exist.

This is highest in East Dorset, where male retirees have an average at 20.9 years to live after retirement, while females have 23.7 years. Male life expectancy is lowest in Manchester, at 15.4 years post-retirement, while for women it is lowest in Corby, 18.6 years.

However, Tom McPhail, head of pensions research for the firm, said regional pension ages were likely to be unworkable in practice.

‘What’s to stop people moving house or changing jobs? The only other solution would be to individually underwrite all 800,000 people reaching retirement age every year; it would be a bureaucratic nightmare and would make it very difficult to talk to individuals about their entitlements,’ he said. 

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