MSE News: State pension age should go up again, report recommends

michaels

Malthusian wrote: »

The headline is disingenuous. Pensioners' life expectancy is going up. As it always has since the end of the Dark Ages. However, the Institute of Actuaries thinks it will go up less quickly in the future than they previously thought it would, which is why they have cut the expected life expectancy for some age groups in the mortality tables.

And they're not even sure about that (obviously).

I agree the headlien is disengenuous. However the substantive point is that if the plans to increase the state pension age are based on projections for increasing life expectancy that are currently over-optimistic based on the more recent data then if the pension age is increased on this basis it is to reduce overall entitlement rather than to reflect best estimate life expecancy projections.

Malthusian

michaels wrote: »

I agree the headlien is disengenuous. However the substantive point is that if the plans to increase the state pension age are based on projections for increasing life expectancy that are currently over-optimistic based on the more recent data then if the pension age is increased on this basis it is to reduce overall entitlement rather than to reflect best estimate life expecancy projections.

If we were raising the State Pension Age in order to preserve the same level of entitlement as intended when it was introduced in the 1940s, it would be going up to somewhere in the 80s, at minimum.

The State Pension Age is a compromise somewhere between the original State Pension Age and where it "needs" to be. (By "needs" I mean in order to preserve the same balance of benefit and cost between the retired and the working population.) Even if "where it needs to be" has been lowered marginally it is still well above the compromise level.

Note that I'm not advocating that the Government raises State Pension Age to 85. The State Pension has long ceased to be a government benefit for those who are too old to work, and become a form of universal basic income paid from late middle age onwards. We are where we are and it is what it is. Personally I'm an advocate for unadulterated universal basic income but that's another topic completely.

Life expectancy will have to go down a lot more than envisaged in the IoA's report before we get even close to the UK being able to afford to lower the State Pension Age.