The State Pension Age just went political

Baroness Neville-Rolfe

I’ve worried about the appointment of Baroness Neville-Rolfe to head the “independent review of the state pension” on this blog

I quoted Steve Webb – who was parliamentary politician of the year in his final year of office.

Now the Trade Union movement is expressing concern that Baroness Neville-Rolfe is being used to force through the speeding up of a change to the state pension age which would mean those born from 1977 would only be able to draw their state pension at 68.

Here is how TUC General Secretary Frances O’Grady sees it – as reported in today’s FT

The TUC, the UK’s largest union body covering 5.5mn workers, said any “truly independent” review was likely to recommend shelving planned state pension age increases.

“Life expectancy improvements have ground to a halt over the past decade, as Conservative governments’ austerity policies have hit the poor and low-earners hard.

That’s why the government is trying to fix the review by rigging the terms of reference and appointing a Tory peer with a history of pushing for faster and steeper rises to lead it.

This review needs to get to grips with the impact of inequality and growing gaps in life expectancy. Rubber stamping previous plans based on over-optimistic assumptions just won’t wash.”

In my opinion, the appointment of Lucy Neville-Rolfe will continue to antagonise a large number in pensions, including LCP, a pension consultancy not known for having been radicalised. LCP say “there is no case for increasing it until 2051”.

If we were to take mortality as the only measure, then both Frances O’Grady and LCP are right, there has been a flattening out of the anticipated improvement in life expectancy and in fact a marked increase in excess deaths over the pandemic. Whatever is the reason, this supports the case for not accelerating the state pension age.

But there is a more fundamental argument , which is to do with fertility, which argues in the opposite direction

We have not been breeding fast enough in the past fifty years to support the boomers now passing state pension age, something has to give – or so said Baroness Neville-Rolfe in the parliamentary debate on the state pension age in 2017.

“Why are the government not going faster, bringing these changes in more quickly and, perhaps, going up the age range?”

The polarities of these two positions cross over last year, where for the first time in 40 years deaths exceeded births.

The argument is far from conclusive on either side. Popular sentiment will be to keep the SPA where it is for as long as possible , actuarial prudence will probably argue that Baroness Neville-Rolfe is right and that the populists are guilty of short-termism.

And the argument is further complicated by what kind of state pension we want. If we want to re-rate it to match our European and G7 counterparts, we continue to apply the triple lock.

That would mean an increase this year in the state pension of 8% or £775. It looks like we’re getting 3.1% or an extra £290 pa.

Ros Altmann and others have argued for something in between and have been rebuffed by the Treasury.

If we are to lose the triple lock this year, then how easy for us to lose it in future years? How easy is this manifesto promise broken?

The credibility of the Treasury is worsened by suspending the triple-lock and frankly it is not improved by parachuting in a hardliner on state pension increases to independently review state pension increases.

There are plenty of non-political experts who could conduct the review, we had a good one last time around  which was not politicised because it was conducted by the apolitical John Cridland. The best thing right now would be to get John back, or if not him, one of his ilk.

About henry tapper

Founder of the Pension PlayPen,, partner of Stella, father of Olly . I am the Pension Plowman
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