Independent Review of the State Pension Age

SPa

Independent Review of the State Pension Age

Smoothing the Transition

Final Report

March 2017

Independent Review of the State Pension Age

Smoothing the Transition

Final Report

Presented to Parliament pursuant to Section 27 of the Pensions Act 2014

March 2017

? Crown copyright 2017

This publication is licensed under the terms of the Open Government Licence v3.0 except where otherwise stated. To view this licence, visit .uk/doc/ open-government-licence/version/3 or write to the Information Policy Team, The National Archives, Kew, London TW9 4DU, or email: psi@nationalarchives..uk.

Where we have identified any third party copyright information you will need to obtain permission from the copyright holders concerned.

This publication is available at

Any enquiries regarding this publication should be sent to us at: John Cridland Independent Review Caxton House Tothill Street London SW1H 9NA

Print ISBN 9781474142014 Web ISBN 9781474142021

ID 15131722 03/17

Printed on paper containing 75% recycled fibre content minimum.

Printed in the UK by the Williams Lea Group on behalf of the Controller of Her Majesty's Stationery Office

? 5 ?

Table of Contents

Foreword

8

Executive Summary

11

Summary of recommendations

15

Introduction

19

01 Changing Longevity

24

1.1 Life expectancy

25

1.1.1 How life expectancy is measured

25

1.1.2 The drivers of life expectancy

26

1.2 Factors that influence life expectancy

29

1.2.1 Geographical variation

29

1.2.2 Socio-economic factors

31

1.2.3 Areas of deprivation

32

1.3 Healthy life expectancy

34

1.3.1 What does healthy life expectancy stand for and how is it measured?

34

1.4 Factors that influence healthy life expectancy

36

1.4.1 Geographic variation

36

1.4.2 Socio-economic Factors

37

1.4.3 Combining geographical and socio-economic factors

37

1.4.4 Areas of deprivation

38

1.5 Prospects for healthy life expectancy

40

State Pension Age Independent Review

? 6 ?

02 Affordability

42

2.1 Measuring Affordability

43

2.2 Key drivers of ageing society expenditure

44

2.3 Latest OBR spending projections

45

2.3.1 State Pension spending

47

2.3.2 Spending projections in the context of an ageing society

49

2.3.3 Other levers to control affordability

51

03 Patterns of pension outcomes

53

3.1 Intergenerational fairness

54

3.1.1 Pension outcomes across generations

54

3.1.2 Balance of spending

55

3.2 Intragenerational fairness

55

3.3 Reliance on State Pension

58

3.3.1 Income reliance

58

3.3.2 Housing

59

3.4 Affected groups

61

3.5 Carers

62

3.6 Ill health and disability

65

3.7 Self-employed

67

3.8 Black, Asian and minority ethnic groups

67

3.9 Women

68

04 Setting the State Pension age

70

4.1 The principles for setting State Pension age

71

4.1.1 Universality of State Pension age

71

4.1.2 The `up to one third' principle

75

4.1.3 Allowing for notice in between changes

79

4.1.4 The pace of change for each cohort

79

4.1.5 The balance between the principal factors

80

4.2 Approach to setting a timetable

80

4.2.1 The proportion of adult life spent in retirement

80

4.2.2 Determining the timetable for change

81

4.2.3 Future increases in State Pension age

84

4.2.4 Funding the State Pension on a sustainable basis

84

State Pension Age Independent Review

? 7 ?

05 Smoothing the Transition

5.1 Progress so far

5.2 Enabling Fuller Working Lives

5.2.1 Characteristics of longer working 5.2.2 Disengagement from the Labour Market 5.2.3 Supporting older workers 5.2.4 Burnout 5.2.5 Supporting carers 5.2.6 Statutory Carers' Leave

5.3 Mid-Life MOT

5.4 The contribution of older workers as trainers

5.5 Flexibility within a universal State Pension age

5.5.1 Working age conditionality 5.5.2 Means-tested support

5.6 Supporting people over State Pension age to work

5.6.1 Deferrals 5.6.2 Partial retirement and draw down of State Pension

5.7 Other impacts

5.7.1 Private pensions 5.7.2 Public sector pensions 5.7.3 Social Security system

5.8 Communications

5.8.1 Contribution credits 5.8.2 Planning ahead 5.8.3 Communicating future change 5.9 Future path

Annex A Stakeholder Engagement

Annex B Consultation Responses

88

89

91

92 93 96 97 98 98

99

102

103

104 105

106

106 107

108

108 109 109

109

110 110 110 111

114

119

State Pension Age Independent Review

State Pension Age Independent Review | Foreword

Foreword

 ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download