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Life expectancy and state pensions

Shared UK pension age already short changes Scots by £11,000.

Men and women who have the same state pension entitlement will get less in Scotland than in the rest of the UK, if we stay tied to the Westminster pension and welfare system, due to lower life expectancy, research published yesterday reveals.

The research shows that:

 

  • A 65 year old woman entitled to a total pension of £160 per week could expect to get around £11,000 less in Scotland than counterparts in the rest of the UK as a whole (£10,000 for a man).
  • For a woman who lives in Glasgow, this £11,000 pension gap increases to £22,000 less than in the UK.
  • For a man who lives in Glasgow, this £10,000 pension gap increases to £29,000 less than in the UK.
  • When comparing Glasgow with Harrow, which has the highest life expectancy for men in the UK, the pension gap is £50,000.
  • When comparing Glasgow with Camden, which has the highest life expectancy for women in the UK, the pension gap is £46,000.

 

The latest figures published by the Office of National Statistics show that life expectancy at birth and at 65 in Scotland is higher than it has ever been. However, life expectancy at 65 in Scotland is still the lowest within the UK. In Scotland, 65 year old males and females can expect to live shorter lives - 1.2 years and 1.3 years less respectively - than in the UK as a whole.

Pensions are currently reserved to Westminster, which plans to raise the retirement age to 67 from 2026. In the first year of an independent Scotland, the current Scottish Government would establish an independent commission to consider the appropriate pace of any further change to the retirement age beyond 66.

Newly appointed Cabinet Secretary for Pensioner’s Rights Shona Robison said:

“This research makes clear that Scots are already short changed when it comes to pensions. If we stay tied to the Westminster pension and welfare system, and the state pension age rises at the same pace in Scotland as in the rest of the UK, the risk is that this problem will be compounded.

“The lower life expectancy in Scotland means it would be fairer for people in Scotland if the increase in the pension age was postponed.

“That is why it is right for Scotland to consider a state pension age relatively lower than the rest of the UK.

“I am concerned about Westminster’s accelerated timetable for increasing the state pension age to 67 as it so unfairly disadvantages Scots.

“People living in disadvantaged areas miss out even more – with men in Glasgow seeing £50,000 less over their lifetime than someone of the same age living in Harrow.

“We want to make sure that the pension age suits Scottish circumstances – and, on average, people in Scotland have fewer years in retirement receiving the state pension because life expectancy is lower.

“We have taken measures, such as the smoking ban, taking steps to reduce alcohol consumption and introducing free prescriptions, that will contribute to reducing these inequalities in health.

“Life expectancy is improving but progress will take time, and we don’t want Scots to be disadvantaged in the meantime.”

Deputy First Minister Nicola Sturgeon added:

“This research clearly sets out why examining a delay to the increase in retirement age beyond 66 would be the fairest option for people in Scotland.

“We have already confirmed that we will establish a commission to consider the appropriate pace of further change to the retirement age beyond 66.

“The commission would report to the Scottish Parliament within the first two years of independence, allowing us to make decisions which take into account Scottish circumstances.

“Social Protection spending, which includes pensions and welfare, is more affordable in Scotland than in the rest of the UK – and has been lower for the last five years. The National Institute of Economic Social Research (NIESR) also suggest that individual pensions in Scotland are between six to eight per cent cheaper compared to the rest of the UK.

“The NIESR has also noted that, as part of the UK, Scotland would implicitly be part of a pension contract that would be actuarially unfair.”

Notes To Editors

The commission would report to the Scottish Parliament within the first two years of independence, allowing decisions to be taken which best suit the needs of people in Scotland nearing pensionable age.

The Government, through “Equally Well” its strategy to tackle health inequalities, has shifted the emphasis of approach from dealing with the consequences of health inequalities to tackling the underlying causes such as poverty. 

Read the report here: http://www.scotland.gov.uk/Topics/People/welfarereform/analysis/life-expe ctancy-state-pension

Channel website: https://www.icaew.com

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