State Pension Age review due before 7th May 2017

SnowMan

The Government Actuary Department report crunching the numbers on when SPA should change based on the formulaic approach is found here

https://www.gov.uk/government/publications/state-pension-age-periodic-review-report-by-the-government-actuary

For those not interested in the full report the main figures are shown in table 1.4 where you can look up your SPA under different approaches

1.4 The table below illustrates how the calculated SPa timetables outlined above will impact upon individuals based on their dates of birth.

Table 2: Calculated SPa timetables under specified parameters and assumptions 2028 - 2064 - dates of birth for affected individuals

DOB from, DOB to: SPA under current legislation, SPA under 33.3% scenario, SPA under 32.0% scenario

6th April 1961 - 5 April 1962: 67, 67, 67 to 68*
6th April 1962 - 5 April 1972: 67, 67, 68
6th April 1972 - 5 April 1973: 67, 67 to 68*, 68 to 69*
6th April 1973 - 5 April 1977: 67, 68, 69
6th April 1977 - 5 April 1978: 67 to 68*, 68, 69
6th April 1978 - 5 April 1985: 68, 68, 69
6th April 1985 - 5 April 1986: 68, 68 to 69*, 69 to 70*
6th April 1986 - onwards**: 68, 69,70

* Transitional period - SPa for people born in this period will be somewhere in the range indicated

** This report only considers SPa changes between 6 April 2028 and 5 April 2064

Note that these are based on the latest 2014 mortality projections.

Cridland in his report arbitrarily decides to make half allowance for the 2012 projections to speed up when the increase to age 68 takes place based on the 33.3% percentage.

So those born between 6/4/70 and 5/4/71 have an SPA of 67 under GAD (33.3%, middle figure above) but are in the transitional period from age 67 to 68 under Cridland.

And those born between 6/4/71 and 5/4/72 have an SPA of 67 under GAD (33.3%) but age 68 under Cridland

And those born between 6/4/72 and 5/4/73: are in the transitional period from age 67 to 68 under GAD (33.3%) but have SPA 68 under Cridland

SnowMan

The Pensions Act 2014 places a legal requirement on the Government for the first report into the change in SPA to be published before 7th May 2017.

According to BBC Moneybox this isn't going to happen. I can't find anything official from the DWP to corroborate that, but does look like their 'sources' have briefed the press that this is the case.

JoeCrystal

Maybe because there isn't a Parliament on 7th May 2017. I think the Secretary of State must lay the Report before Parliament? :think: Having said that, it does say before the Seventh. So maybe the purdah kicks in for this report?

EDIT: Actually, it seems they already published it last month:
Link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/611460/independent-review-of-the-state-pension-age-smoothing-the-transition.pdf

"Independent Review of the State Pension Age
Smoothing the Transition
Final Report
Presented to Parliament pursuant to Section 27 of the Pensions Act 2014"

SnowMan

JoeCrystal wrote: »

Maybe because there isn't a Parliament on 7th May 2017. I think the Secretary of State must lay the Report before Parliament? :think: Having said that, it does say before the Seventh. So maybe the purdah kicks in for this report?

EDIT: Actually, it seems they already published it last month:
Link: https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/611460/independent-review-of-the-state-pension-age-smoothing-the-transition.pdf

"Independent Review of the State Pension Age
Smoothing the Transition
Final Report
Presented to Parliament pursuant to Section 27 of the Pensions Act 2014"

That is the 'independent' review by John Cridland.

However my understanding is that the Secretary of State has to then put a report to parliament before 7th May 2017 on the outcome of the review having first considered the Cridland Report and the report by the Government Actuary.

Anyway the key practical point (as opposed to legal point) is we won't know until after the election what is going to happen in relation to State Pension Age, although it could become an election issue, along with the triple lock.

Silvertabby

Did I read somewhere that any future increases will be subject to at least 10 years notice?

SnowMan

Silvertabby wrote: »

Did I read somewhere that any future increases will be subject to at least 10 years notice?

That is the stated intention.

Which is why the current review isn't looking at the timetable before April 2028. That is it will only potentially affect those currently with a legislated SPA of 67 or higher.

My other thought is that the delayed report could count as the review in the 2017-2022 parliament (assuming they make it through the 'fixed' 5 year term) in which case the next subsequent review might now not be until 2023 (it is supposed to be within 6 years of the previous report) which because of the 10 year rule might mean that someone aged 52 may just need to get through the current review, and the indication is that they probably will, to be fairly safe from an SPA increase.

Suffolk_lass

SnowMan wrote: »

However my understanding is that the Secretary of State has to then put a report to parliament before 7th May 2017 on the outcome of the review having first considered the Cridland Report and the report by the Government Actuary.

Anyway the key practical point (as opposed to legal point) is we won't know until after the election what is going to happen in relation to State Pension Age, although it could become an election issue, along with the triple lock.

You are right. Because Parliament has risen, there is no Parliament to present the outcome to, and no Secretary of State to present it. As Parliament called a General Election for 8th June, the period of purdah began after close of business on 21st when all the ministers finished. The Civil Service is care-taking the rule of the Country until a new Government is elected and takes office. They are not allowed to publish anything that is in any way contentious or could be interpreted as contradicting somebody's manifesto, or prejudice the election by presenting any views that could be interpreted as implementing the outgoing government's policies - so while you might get the balance of trade figures published (e.g.) you won't get the Brexit negotiation plans.

chiefie

SnowMan wrote: »

That is the stated intention.

Which is why the current review isn't looking at the timetable before April 2028. That is it will only potentially affect those currently with a legislated SPA of 67 or higher.

My other thought is that the delayed report could count as the review in the 2017-2022 parliament (assuming they make it through the 'fixed' 5 year term) in which case the next subsequent review might now not be until 2023 (it is supposed to be within 6 years of the previous report) which because of the 10 year rule might mean that someone aged 52 may just need to get through the current review, and the indication is that they probably will, to be fairly safe from an SPA increase.

Fingers crossed on that one 🤞

isasmurf

Suffolk_lass wrote: »

You are right. Because Parliament has risen, there is no Parliament to present the outcome to, and no Secretary of State to present it. As Parliament called a General Election for 8th June, the period of purdah began after close of business on 21st when all the ministers finished. The Civil Service is care-taking the rule of the Country until a new Government is elected and takes office.

Point of order: Although they are not MPs when parliament is dissolved, the government remains in place and ministers remain in charge of their departments until a new government is formed.

SnowMan

Link to the DWP statement is at

https://www.gov.uk/government/news/new-timetable-for-state-pension-changes-to-maintain-fair-and-sustainable-pension

Some interesting informed comment from Towers Watson

https://www.towerswatson.com/en-GB/Insights/Newsletters/Europe/benefits-hot-topics/2017/Government-sticks-but-may-still-twist-on-SPA-increase

They note that the Government are moving away from the one third proportion that they originally proposed as the proposed increase is pushing slightly closer to 32%. They say

The Government now states that it ‘is minded to commit to up to 32% as the right proportion of adult life to spend in receipt of State Pension’ as its longer-term objective. It further suggests that increases may need to occur more frequently than every 10 years (a limit that was recommended by Cridland), even though its decision to propose a start date of 2037 for the next increase is influenced by a desire to establish a reasonable gap since the end of the current round of increases in 2028.

Remember that the Cridland proposal partly used out of date mortality data to justify an earlier increase in SPA to age 68. As a result the proportion is not one third but has been artifically tweeked slightly towards a 32% proportion.


My view is that those born between 6th April 1970 and about April 1973 will under this proposal have their SPA increased from age 67 to age 68 (or somewhere between 67 and 68) solely because of a political decision to ditch the original one third detailed methodology. The Government can try and hide behind the supposedly independent Cridland report, but that doesn't wash with me.

Those born beween about April 1973 and April 1978 would have had their SPA increased from age 67 to 68 based on the original one third detailed methodology.

So I think those born between April 1970 and about April 1973 have good reason to feel aggrieved (note I'm not in that age group).