Cameron’s plans cut retirement by 17% in Glasgow


Male life expectancy at birth in UK cities ranges from 70.8 years in Glasgow City to 83.7 years in Kensington and Chelsea. The results show that Conservative plans to raise the pensionable age to 66 from 2016 will have a different impact on retirement plans in different parts of the country.

The table below taken from the Office for National Statistics shows life expectancy at birth for seven local authorities (the highest, lowest, and five in between). Left Foot Forward has calculated the percentage of projected retirement that will be lost by raising the retirement age from 65 to 66.

Cameron's plans have a different impact on retirement depending on where you live

In the London borough of Kensington and Chelsea, the average worker will lose 5.3 per cent of their retired life. This compares to 17.4 per cent in Glasgow City. In David Cameron’s constituency of Witney, in West Oxfordshire, people will lose 6.8 per cent of their retired life.

It should be noted that the figures are indicative. Those aged 65 are likely to live beyond their life expectancy at birth.

The Government originally planned to raise the retirement age in 2026. The Conservative plans are reported to save £13 billion per year but no savings will be realised in this parliament or the next. Speaking on BBC News this morning, Kevin Maguire of the Mirror described the move as “macho politics.”

UPDATE 12.19

The basic state pension is £95.25 for an individual. This means that the average male will lose £4,953 from raising the retirement age by one year to 66.

For those already aged 65 the spread of retirement lost is smaller. Using ONS figures, life expectancy at 65 in Glasgow is 78.8 and in Kensington & Chelsea is 87.7 (a spread of 8.9 years compared to 12.9 years at birth). Raising the age to 66 therefore means that someone who is 65 today will lose 7.2% of their retirement in Glasgow City but just 4.4% in Kensington & Chelsea.

UPDATE 16.30 (Oct 7th)

DWP are reporting that “Initial estimates suggest that raising the State Pension Age only for men to 66 in 2016 would only save £1.8bn in pension payments and £0.7bn in taxes and NICs, i.e. a total saving of approximately £2.5bn. (This doesn’t take account of Pension Credit which would reduce the savings further).”

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  • hmmm

    I agree entirely.

    It’s time for pensions to be devolved to local councils and away from Whitehall.

    Rich people who are retiring will move to poor areas before they retire to get their pension quicker. This will decrease inequality.

  • DevonChap

    You are only looking at male life expectency. You should be clearer with your figures unless you want a reputation like Gordon Brown.

    In Glasgow women live on average 6.3 years longer than men, in Kensington that difference is only 4 years. The national average is that women live 4.2 years longer than men so equalising their pension ages sooner is hardly unfair.

    Perhaps you should look to why men in Labour run Glasgow live such short lives.

  • Charlie

    From a fairness point of view this is a very strong point. The irony is that raising the retirement age in a place like Glasgow may lead to people living longer there as people will have a sense of purpose for longer built round work and all the socialisation associated with it. The reason why people in K&C live longer is they have a more purposeful retirement and their networks and social capital is stronger as well as better access to health. Their accrued wealth gives them more to live for, whereas in poorer communities the loss of a lot of socialisation associated with work may lead to previously more self-destructive behaviour (ie smoking obesity etc) killing them earlier. In other words we need more research to examine the impact of retirement on various communities and the inequalities that arise out of loss of socialisation

  • Anon

    See also Steve Webb’s (LD work and pensions spokesman) criticisms here – he reckons the sums don’t add up:

    http://webbsteve.blogspot.com/2009/10/tory-rise-in-state-pension-age-do-sums.html

  • Dan W

    An interesting article, but unfortunately complete nonsense. The figures used are not indicative there wrong. Life expectancy at birth and life expectancy at retirement are completely different concepts. The variations in life expectancy at birth between different areas are mainly due to differences in child mortality rates, deaths due to car accidents and violence in early adulthood and deaths related to life style choices in middle age. The differences in life expectancy at retirement would be much smaller between areas. Indeed they may disappear com pletly. People would not lose significantly more of thier retirement in poor compared to rich areas. You article deliberately misuses statistics. I challenge you to rewrite the article using life expectancy at retirement figures.

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  • Roger

    As someone who (if I am spared) will be unlucky enough to hit 65 a week and a half after this govt’s decision will raise the retirement age to 66 anyway I am already resigned to losing 11 months and 19 days of my pension.

    However your calculations are not really that indicative given that there is a big difference in life expectancy at 65 (or 66 or whatever) and life expectancy at birth.

    The Govt Actuaries Dept life tables at http://www.gad.gov.uk/Demography%20Data/Life%20Tables/Eoltable06.html actually give life expectancy at birth for a UK male born today as 78.

    But according to the same life tables a UK male aged 65 now has a life expectancy of 18 more years – or 83.

    Needless to say while the life expectancy at birth figure is almost certainly going to be complete bollocks (in 1944 when today’s 65 year old was born his LEAB was actually 62 – so he has already well outlived his predicted span), but actuarial life tables are sounder statistically the older the subject is – if they weren’t all the life insurance companies would be out of business.

    A truer calculation which I don’t have time to do right now would be to look at people who are between 49 and 58 now and will thus be directly affected by a change in the pensionable age qualification date from 2026 to 2016.

    As for a UK male life expectancy at 58 is 23 years (i.e 83) we are talking nationally about something closer to 5% of pensionable years lost.

    I don’t have any local level actuarial tables to hand (and am not even sure they exist at a year of age/LA level) but suspect that even for Glasgow it is unlikely to be above 10%.

    So while it is a valid point that a lost year of pension is a bigger deal for a Glaswegian than a Kensington and Chelseaite in using life expectancy at birth rather than life expectancy at current age you are are almost certainly exaggerating the variance by a statistically significant sum.

    One could also raise the question of whether as is well established there is a positive correlation between the onset of dementia and retirement age, having to work for an additional year might actually improve quality of life for both you and everyone who cares about you by making it significantly less likely that you will spend your final years in the living death of Alzheimer’s.

    One could also argue that if we are able to continue working that extra year in real pensionable jobs (a big if), the additional savings and income they will have when they do retire will much more than compensate them for the paltry excuse for an income that the state pension provides.

  • Roger

    Typo – LE at 58 is actually 81 rather than 83 – so nationally we are talking about 6% rather than 5% of pensionable years lost.

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  • Will Straw

    hmmm – fascinating idea

    DevonChap – That was an oversight on my part. Happy to amend to make clear that these are figures for men. The Tory’s plans for female retirement are unclear in any case.

    Roger / Dan W – Life expectancy at 65 in Glasgow is 78.8 and in Kensington & Chelsea is 87.7. Raising the age to 66 therefore means that someone who is 65 today will lose 7.2% of their retirement in Glasgow but just 4.4% in K&C. The spread comes down but is still startling. The problem with using these numbers, of course, is that they only apply to people who are 65. For those of us in our 20s, the figures I used are more accurate.

  • http://twitter.com/evidencematters/status/4652783998 Evidence Matters

    Agree – fine discussion in comments. rt @mattwardman Who needs Channel 4: Blogs get factchecked in the comments. http://bit.ly/PaEj5

  • Andrew Fish

    Isn’t this all spin given that Labour were already planning to hike up the pension age and that all the Conservatives are doing is bringing it forward? Or did I miss some major announcement that was going to improve life expectancy in Glasgow before it kicked in?

  • Stuart Yates

    Re Glasgow’s short life expectancy: So that’s what you get after fifty or so years of Labour governing the city.

  • http://twitter.com/fionacullinan/status/4652892789 Fiona Cullinan

    One for sub-editors. RT @mattwardman Who needs Channel 4: Blogs get factchecked in the comments. http://bit.ly/PaEj5

  • Roger

    Stuart’s childish sneer hardly justifies more than the traditional two-word reply.

    Charlie makes a more substantial point and having Scottish working class roots myself its difficult to disagree that Glaswegians lost years of LE are to some degree self-inflicted.

    But to quote a recent post by US blogger Ezra Klein:

    This reminds me of Charles Karelis’s “The Persistence of Poverty.” The basic argument is that the wealthy misunderstand the mental state of the poor, which leads them to make conceptual errors when creating policies to address poverty, or, in this case, obesity. Think of a bee sting, he advises. If you have a single bee sting, you’ll go buy some salve to take away the pain. Now imagine three bee stings, a sprained ankle, a burn, a cut, a crick in your neck, a sore throat, and arthritis. Does the bee sting matter anymore?

    Karelis argues that this is more the situation of someone in poverty. Obesity is bad, but it may be just one of many bad things. Overdue bills. A horrible part-time job. Endless commuting time on the bus. A mother with diabetes. A child running with the wrong crowd. A leaking roof. In that scenario, slowly reversing your weight gain might be a good idea, but it hardly makes a dent in the overall crumminess of the conditions. It won’t replace pain with pleasure. So you do things that are surer to replace pain with pleasure, like have a delicious, filling, satisfying, salty, fatty meal. That may make your overall situation more unpleasant, but then, making that situation pleasant didn’t seem like an option in the first place.

    This, he would say, is fundamentally different than the situation of someone who is fundamentally happy with his life but thinks he should lose 30 pounds. For that person, those 30 pounds are the main thing standing between him and perceived happiness. It’s one bee sting instead of a dozen ailments.

    [END QUOTE]

    In any case long years of retirement living on a state pension in a Govan tower block is probably nowhere near as enticing a prospect for Rab and Mary as selling up ones place in Fulham and dividing ones time between a cottage in Devon and a Villa in Umbria is for Henry and Caroline.

    Given this I am not at all sure that Rab’s and Mary’s life choices are that less rational.

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  • http://www.mattwardman.com/blog/ Matt Wardman

    >Will Straw

    Good to see a response, Will.

    >From a fairness point of view this is a very strong point.

    I’m not convinced of that, or particularly with the basis of the post even after we have sorted the figures. Perhaps someone is going to argue for pensions starting a standard time before death is expected to make them totally fair.

    Has the exactly same not been the case since – when – 1945? i.e., pensioners in Glasgow been “discriminated against” relative to pensioners in Kensington through receiving a similar pension for a shorter point.

    You could say the same for women versus men. Why aren’t women paid a smaller pension due to their longer life? Shock, horror – men have had 2-4 years of their retirement stolen for the last 60 years (assuming the life expectancy comparison holds over that period).

    Also of course, exactly the same argument about cutting retirement in Glasgow could be made against Mr Brown and Darling’s already planned changes to pensionable age for 2026.

    It’s an important issue, but as a partisan point I think you are probably flogging a statue of a dead horse on this one.

    The factchecking culture among the commenters is encouraging, though.

  • http://pluralprogressive.wordpress.com/ Luke

    Very glad to see this post. There is always a class dimension in Tory policy that punishes the poorer sections.

    Goes to show that the party hasn’t moved that far to the left since the days of Thatcher.

  • http://twitter.com/zliv/status/4653283627 Zoe J

    Cameron’s plans cut retirement by 17% in Glasgow http://bit.ly/OdTTx

  • Roger

    Will,

    Thanks for the updates.

    However I’d point out that it is only technically true that an average male will lose £4,953 from a one year raise in the pensionable age if he was expecting to receive no other income whatsoever during that year.

    If he is working full-time he would actually be better off by by £6,000 a year even if he is only working for the minimum wage.

    Working tax credits (which presumably will be made available to 66 if they still exist at all) would presumably bump this up in many cases.

    Even on JSA he would get about two-thirds of what he would have got on a state pension – and might conceivably get more depending on what other benefits he is entitled to.

    The loss is thus more reasonably put at the difference between whatever the state pension would have been and whatever JSA will be.

    Of course having to pay JSA for another year to many if not most 65 year olds will presumably eliminate much of the Tories savings – but if a significant proportion are allowed to continue working by their employers the additional tax revenue should more than make up for that.

    OTOH stopping an entire years cohort from retiring at 65 will mean there are that many fewer job vacancies for younger workers to go into – so its all swings and roundabouts.

  • http://twitter.com/frankcamaratta/status/4654509645 Frank Camaratta

    Cameron’s plans cut retirement by 17% in Glasgow | Left Foot Forward http://short.to/ssx2

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  • Roger

    As Steve Webb’s blog and comments there point out the real Achilles Hell of this proposal is the figure of £13bn that it is supposed to save.

    From Cameron’s rather garbled attempt at clarifying the proposals this morning the £13bn seems to be based on a piece of theoretical work by NIESR published in July http://www.niesr.ac.uk/pdf/EWLfin.pdf.

    While this does make a fairly compelling macro-economic case for extending working lives it does not say anything as silly as that £13bn can be ‘saved’ through a one year increase in UK state retirement ages.

    In fact it goes to some trouble to discount any such notion pointing out that such a change will only have a marginal effect in macro-economic terms due to it impacting on only the very poorest section of workers nearing retirement age.

    Rather they are describing the overall economic effect of a much more radical change in culture to extend the working lives of the whole workforce – bankers as well as binmen – and calculating the increase in GDP that would theoretically result from an increase in labour force supply:

    ‘A coordinated increase in working lives of one effective year (18 months on the age of retirement) could increase tax revenues and reduce retirement spending by enough to reduce the government deficit by 1 per cent of GDP permanently’.

    The £13bn bandied about by the Tories appears to have been back-calculated from total UK GDP (money GDP for 2008/9 was £1,435bn so 1% of this would be £14bn) rather than from any detailed calculation of pensions paid or revenues raised.

    However the Tories appear to have no proposals for ‘a coordinated increase in working lives’ other than changing the state pension age – a measure which NIESR explicitly state would not produce anything like the full effects predicted in their model.

  • http://twitter.com/obesityatwork/status/4657056429 Yancey Thomas

    Cameron’s plans cut retirement by 17% in Glasgow | Left Foot Forward http://bit.ly/EfxwC

  • http://www.touchstoneblog.org.uk Nigel Stanley

    Over at Touchstone we’ve looked at this too – concentrating on the benefit implications and whether the policy will leade to many more people working longer. http://www.touchstoneblog.org.uk/2009/10/conservative-plans-to-raise-the-state-pension-age/

  • http://twitter.com/da4su/status/4661067638 Daniel Arlt

    Cameron’s plans cut retirement by 17% in Glasgow | Left Foot Forward: A horrible part-time job. Endless com.. http://bit.ly/ZOqaU

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  • http://twitter.com/bencooper86/status/4666927006 Ben Cooper

    Tory plans would mean a 17.4% loss of retirement for men in Glasgow but only a loss of 6.8% in DC’s seat! http://bit.ly/tB39F

  • http://twitter.com/bencooper86/status/4666933115 Ben Cooper

    Tory plans would mean a 17.4% loss of retirement for men in Glasgow but only a loss of 6.8% in DC’s seat! http://bit.ly/tB39F #cpc09

  • http://twitter.com/tonytrainor/status/4691651119 Tony Trainor

    RT @BenCooper86 Tory plans would mean a 17.4% loss of retirement for men in Glasgow but only 6.8% in DC’s seat! http://bit.ly/tB39F #cpc09

  • http://twitter.com/homeraking/status/4692353506 Homer A. King

    RT:Tory plans=17.4% loss of retirement…" http://bit.ly/tB39F THX @BenCooper86 @tonytrainor BAD 4 UK! HillaryC’d have us werkin till 72.

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