State pension age plan shelved as life expectancy falls

But the problems with life expectancy and long-term health long-predate the pandemic, says Veena Raleigh, senior fellow at the King’s Fund, a healthcare think tank.

Life expectancy growth had effectively plateaued in the years leading up to 2020, says Raleigh. “We started to see rising levels of obesity and so on. Our life expectancy virtually stalled in the decade,” she says. 

The data unwinds the headline argument for increasing the state pension age. “Cutting costs would be the only reason to press ahead with accelerating the state pension age,” says former pensions minister Baroness Ros Altmann.

“Until recently, I believe the Government was very keen to press ahead with accelerating the rise in the state pension age, but it may be rethinking,” she adds.

To press ahead would be a political minefield. “Any cost savings will not arise until after the next election, whereas if there is a decision to increase state pension faster, the political downside cost could be immediate,” says Baroness Altmann.

The Government seems to be dragging its feet. Since the Cridland review, another independent review has been submitted by Baroness Neville-Rolfe. By May, Rishi Sunak’s Government needs to set out its proposals and publish them. But the Government has so far been silent. 

It is preventing crucial debate and keeping the public in the dark about which changes might be on the cards by not releasing the independent review it received in September sooner, says Work and Pensions Committee (WPC) chair, Sir Stephen Timms. 

“I don’t understand why they’ve sat on it for six months now, without publishing it when there ought to have been a wider public debate,” the former Labour Shadow Secretary for Work and Pensions says. 

“The life expectancy expectations are at the moment going backwards. So it’s hard to see what the case would be for accelerating the increase in the state pension age,” he adds.

Tinkering with retirement ages tends to bring on a politically explosive debate, as the one that is playing out on the streets of Paris currently. 

To avoid upsetting voters every few years, countries are increasingly moving towards linking the state retirement age with longevity predictions.