Inform the debate on the effect of the equalisation of the state pension age on women

mumps

I think the costings are probably impossible to calculate accurately because of all the variables.

To take my case as an example: I retired at 61, I won't get SP till almost 65, until 2011 changes I would have got it at 63 and 3 months. The government have saved 18 months of my pension, currently worth about £145 per week but as I have been a carer for 20 odd years I am now claiming carers allowance so they are only saving about £80 a week, not £145. I am not paying as much tax as when I was working, I do still pay tax as I have a private pension, investments and the CA, can't work that out off the top of my head but it is quite alot but the person I was training to do my job has now gone full-time instead of part-time and had a promotion and pay rise so she is probably making up the shortfall in my tax payment. So we are left with the £80 a week saving but she is no longer eligible for tax credit. I don't know how much she was getting but I am assuming a £15k payrise could result in a big reduction in tax credit, the govt are probably saving more on her tax credits than my pension minus CA, in my case they got both as I retired anyway but if I had stayed at work for another 3 and a half years it could have cost the government money to keep me at work longer.

Think of trying to do this calculation for all the 1953/54 women, the ones who have lost most by this change, quite a big job I think.

What I am trying to say is it is not just how much is it going to cost to pay the pension, there are alot of other things that will change if people do or do not retire.

McMoon

Thank you for the replies to my post #191.

To hyubh & bowlhead99:
the politicians seem to imply age equalisation = equality = fairness but its clearly more complex.
The DWP Jan 2016 'Impact of nSP' report shows that even when SPAs are equal, median female SP will only be 80% of male for 2021 retirees, 90% by 2030 and not 100% until 2041. And even that owes a lot to the nSP which wasn' t part of the age-equalisation Acts.

To Daniel54 & colsten:
thanks - the various costings all seem to derive from govt. numbers,

And thanks to mumps, I begin to see why!

So if any transitional proposals come out of tomorrow's Debate, or from Waspi and others, then only Govt have the technology to cost them?

Various commentators (and doubtless MPs) say there is no money anyway, but Gov Actuary 'draft Soc. Sec. benefits up-rating order 2016' seems to show the NI Fund could double, treble or quadruple by 2020/1.
Has the extra been 'spent' already?

SnowMan

McMoon wrote: »

Thank you for the replies to my post #191.

To hyubh & bowlhead99:
the politicians seem to imply age equalisation = equality = fairness but its clearly more complex.
The DWP Jan 2016 'Impact of nSP' report shows that even when SPAs are equal, median female SP will only be 80% of male for 2021 retirees, 90% by 2030 and not 100% until 2041. And even that owes a lot to the nSP which wasn' t part of the age-equalisation Acts.

Do you mean this report

https://www.gov.uk/government/publications/new-state-pension-impact-on-an-individuals-pension-entitlement-longer-term-effects

Where it says:

Figure 16 above shows that in terms of median net lifetime nSP income in retirement, although on average women receive less nSP per week than men up until approximately 2040, this is offset by the fact women tend to live longer than men, so the total amount of net nSP received through the whole of retirement by women is consistently higher than that of men (by on average more than 10% for those reaching SPa between 2016 and 2060).

so the DWP are saying that men are those facing inequality under the new state pension from the outset.

hyubh

McMoon wrote: »

the politicians seem to imply age equalisation = equality = fairness but its clearly more complex.

Depends what you mean by 'equality'. Equality before the law is something quite different to equality of income.

The DWP Jan 2016 'Impact of nSP' report shows that even when SPAs are equal, median female SP will only be 80% of male for 2021 retirees, 90% by 2030 and not 100% until 2041. And even that owes a lot to the nSP which wasn' t part of the age-equalisation Acts.

While I agree that one driver of the new state pension is a sort of baseline equality of outcomes, it and the WASPI debate are orthogonal, even though both concern the state pension.

JezR

The National Insurance Fund surplus goes up and down on a number of factors, mainly on the economic cycle. It was over £90 billion in surplus around 2004/5 but recently has needed to be propped up with a Treasury grant in the last 2 years to ensure it remained solvent.

It should increase in the next few years from increased contributions related to the final ending of contracting out, but who knows what may happen in the event of a future recession and longer term projections see it falling anyway.

mumps

SnowMan wrote: »

Do you mean this report

https://www.gov.uk/government/publications/new-state-pension-impact-on-an-individuals-pension-entitlement-longer-term-effects

Where it says:so the DWP are saying that men are those facing inequality under the new state pension from the outset.

I am sure I have read that life expectancy is starting to level out between men and women. I will see if I can find it.

Here is it http://www.bbc.co.uk/news/health-17811732

So it is showing that it will have equalised by 2030 and life expectancy will be 85 so men retiring under the new pension arrangements should have the same life expectancy as women.

SnowMan

mumps wrote: »

I am sure I have read that life expectancy is starting to level out between men and women. I will see if I can find it.

The DWP conclusions I mentioned above appear to be based on the independently produced 2014 life expectancy projections (see page 3 of the DWP report), which as I understand it allow for a narrowing of the difference in life expectancy between men and women. In reality these things are very difficult to predict.

The 2014 projection life expectancy data can be found here:

http://www.ons.gov.uk/ons/rel/lifetables/past-and-projected-data-from-the-period-and-cohort-life-tables/2014-based/stb-2014-past-and-projected.html

see also the population estimates e.g.

http://www.ons.gov.uk/ons/rel/npp/national-population-projections/2014-based-projections/rpt-4-mortality-assumptions.html

missbiggles1

bowlhead99 wrote: »

Wow that does sound kerraazy!

A person who is several years younger than another person, has to wait until an older age for state pension entitlement because rising life expectation has caused the government to put back the state pension age. Seems quite normal to me. Most countries are doing it.


I don't think your example shows that the population and economy has been badly affected at all?


The SP does not contain an 'extra because you're a man' component. Equalising SPA means everyone gets it at the same age and calculated on the same basis. If the median SP is lower for women it is because they contributed for fewer years, and also perhaps do not get as much 'earnings related pension' because they contributed less per week over their working lives. Does that mean they get less than what they 'deserve'? I expect some women would say so, but the men would not.

However, you are talking about 2015 retirees. By the time the mid-fifties women get to retire, they will be retiring on the post-April-2016 system, where they are able to get NI credit for various things: time on maternity; time not working but looking after children on child benefit up to age of 12; time being a carer. The medians claimed by the two sexes will converge with the addition of these things and the removal of earnings related pension etc.

So, equalisation and moving to the 'new system' is a good thing in terms of fairness. Personally I won't qualify for SP for a few decades and will be at an older age than today's retirees, and would have preferred to be able to retire on the old pre 2016 system (because the large amounts of extra NI I've paid over the years as a high earner would have given me a larger pension). But that has been debated elsewhere and I can't really complain, it just means I see my extra NI paid as an extra general tax.

You get all that on the pre 2016 system.

High earners don't get larger pensions than anybody else.

mumps

SnowMan wrote: »

The DWP conclusions I mentioned above appear to be based on the independently produced 2014 life expectancy projections (see page 3 of the DWP report), which as I understand it allow for a narrowing of the difference in life expectancy between men and women. In reality these things are very difficult to predict.

The 2014 projection life expectancy data can be found here:

http://www.ons.gov.uk/ons/rel/lifetables/past-and-projected-data-from-the-period-and-cohort-life-tables/2014-based/stb-2014-past-and-projected.html

see also the population estimates e.g.

http://www.ons.gov.uk/ons/rel/npp/national-population-projections/2014-based-projections/rpt-4-mortality-assumptions.html

Strange isn't it, the BBC one says it is based on ONS figures as well. I love statistics, they really can prove almost anything. The gap is closing though even on that link.

I think I see the difference, the ONS projection is based on life expectancy at birth, the calculation by the Professor on the BBC site has projected for 30 year olds and as more boy babies die than girl babies die it changes the result. Well that is how I read it. So the one based on projection for people who reached adulthood seems more appropriate as babies obviously aren't paying NI.

SnowMan

mumps wrote: »

Strange isn't it, the BBC one says it is based on ONS figures as well. I love statistics, they really can prove almost anything. The gap is closing though even on that link.

I think the BBC are looking for an interesting story so they've just found a professor who has projected a one year trend or something that probably won't continue. The professor seems to be an adviser to the ONS rather than part of the ONS.

In all honesty it is a bit of a guessing game, but if we are trying to look at it objectively then women will almost certainly continue to live longer than men on average at least until we hit a point where state pension amounts become equal.

I'm not assuming the DWP figures are correct though, I find the DWP statistic quite hard to believe, and without seeing the calculation I'm slightly dubious that men will get on average more than 10% less state pension throughout their retirement than women.