Sports Coverage from their Lordships’ House
Today’s BeeLine comes, once again, with a report on the debate in the House of Lords on aspects of the Pensions Bill. This extract, which I think will interest you, is part of the debate on the issue of increases to the State Pension Age, but with a nice twist against the run of play on unfunded public sector pensions from Lord Oakeshott that almost chipped the goalkeeper from forty yards out. As I said yesterday, this stuff is more compelling than live sports coverage with some nice skills on the ball being displayed by all the main characters. The crowd love it! Here’s the replay:
The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord McKenzie of Luton): My Lords, under the Pensions Act 2007, the state pension age for men and women will increase to 68 by 2046. This increase is broadly in line with projected increases in average life expectancy and is a sensible response to the demographic challenge we face today. It will be for future Governments to consider any further increase beyond 68, if evidence indicates that life expectancy continues to further increase in the latter part of this century.
Lord Sheldon: My Lords, I thank my noble friend for that reply, which was rather limited. In the early post-war years, life expectancy after retirement was only a few years. We have seen a much greater increase in retirement years. Is it not clear that the large numbers of doctors and scientists involved in the extension of life will lead to a much greater increase than the Government’s proposed three years, from age 65 to 68, in 2046? What consideration is being given to age in pension provision, given such a change in life expectancy?
Lord McKenzie of Luton: My Lords, the timetable for changes until 2046 is at the limit of our current abilities to project life expectancy. Increasing the state pension age to 68 in 2046 is broadly in line with those projected increases, which will ensure, as the Pensions Commission recommended, that each generation spends a broadly similar proportion of adult life receiving the state pension and that our state pension reforms are affordable. Following the state pension reforms, from 2020 to 2050, men will live approximately 21 years after the state pension age; for women it will be 24 years. The time spent after the state pension age over that period as a percentage of working life will broadly be even, at around 30 per cent for men and 33 per cent for women.
Lord Brookman: My Lords, I may be coming to this subject from the wrong angle, but when I started work in the steel industry in 1951 it was pretty tough. Some men were well over 70 with no pension and very poor conditions of employment. That was rectified under a Labour Government. We are not turning the clock back, are we?
Lord McKenzie of Luton: No, my Lords, on the contrary, in the 2007 Act we made significant improvements to state pension provision, and the Bill
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Lord Oakeshott of Seagrove Bay: My Lords, what was the average age last year at which public sector employees retired with a full pension? If women will have to wait eight years longer for their basic state pension, what is the projected rate at which retirement age in the public sector will rise? If the Minister does not have the answers at his fingertips, will he let me know? Will the Government publish every year the average retirement age of public sector employees on a full pension?
Lord McKenzie of Luton: My Lords, I will be very happy to seek those figures and provide them to the noble Lord, but we should not confuse the age at which people retire with the age at which the basic state pension becomes payable: those are two separate things. As the noble Lord is aware, between 2010 and 2020 there will be equalisation, currently up to 65, between men and women, with further changes after that. Off the top of my head I think that the average retirement age in the public sector is something like 62, but I will write to confirm that in case it is not right.
Baroness Turner of Camden: My Lords, what steps will the Government take to ensure that employment is available at these later ages? Many employers currently seem reluctant to retain people beyond the normal retirement age. Steps will have to be taken to ensure that employment is available. Do the Government have this in mind?
Lord McKenzie of Luton: Yes, my Lords, my noble friend is right to press on this matter. I confirm that there is no national mandatory retirement age, although there is still the default retirement age of 65, which we are committed to reviewing in 2011. There are 800,000 more people between 50 and state pension age in employment now than there were a few years ago, but there are real challenges and we are working with employers to increase flexibility in employment arrangements, to make sure that there is proper skills training for older people as they wish to change their role within the labour market and to make sure that there is not discrimination in practice, although obviously we have dealt with the legislative framework to prevent that.
Lord Skelmersdale: My Lords, for some time now the Government have been encouraging people to continue in some form of paid employment after the state retirement age. At the moment, this encouragement applies to those up to age 70. First, how many people
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Lord McKenzie of Luton: My Lords, that encouragement is not specifically targeted at people up to the age of 70. We encourage every older person who wishes to continue in work to do so for as long as they feel able. I do not have to hand the data concerning those who are actually in employment between state pension age and 70, but I shall happily write to the noble Lord.
Baroness Howe of Idlicote: My Lords, once we have reached that first point of equality of opportunity, at which the statutory state retirement age is the same for both sexes, may we expect the Government to insist that insurance companies pay on the same basis of non-discrimination and equality for annuities?
Lord McKenzie of Luton: My Lords, the noble Baroness is trailing the amendment that we are due to consider very shortly in Committee on the Pensions Bill. It is riveting stuff, and I encourage noble Lords to stay for it. As the noble Baroness will be aware, we do not believe that it is discriminatory that there are different annuity rates for men and women so long as those rates are based on hard evidence and facts, which take into account the differences in longevity between men and women, although the gap in life expectancies is narrowing.
Baroness Greengross: My Lords, will the Government reconsider the review and carry it out a little sooner? It is sad that a lot of the people concerned will probably be dead by the time the review of the current anti-age-discrimination legislation takes place.
Lord McKenzie of Luton: My Lords, I think the noble Baroness may be referring to the review of the default retirement age. As I said earlier, we have committed to do that in 2011. There may well be good arguments for doing it early, but that is the commitment that we made. We recognise that it is a potential constraint on people being able to stay longer in the labour market.
16 July 2008
Source: Lords Pensions Bill debate, Monday 14 July 2008.
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