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.
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).”
34 Responses to “Cameron’s plans cut retirement by 17% in Glasgow”
Conservatives unveil economic policies – LIVE | Reaction Radio
[…] at Left Foot Forward has identified one consequence of the Tory pension plan and he has posted a fascinating piece about it on his website. He says that, because average life expectancy varies widely in different parts of the country, the […]
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.
| Banter News | Conservatives unveil economic policies – LIVE |
[…] at Left Foot Forward has identified one consequence of the Tory pension plan and he has posted a fascinating piece about it on his website. He says that, because average life expectancy varies widely in different parts of the country, the […]
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.