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”
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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.
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.
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.