The Pensions Bill was debated in Parliament yesterday, with the coalition government pressing ahead with their plans to raise the state pension age for men and women.
A Commons vote on the second reading of the Pensions Bill was won by 302 votes to 232, a majority of 70.
The coalition plans to increase the state pension age for men and women from 65 to 66 in 2020.
Women will see their state pension age increased from 60 to 65 by 2018, which has resulted in many commentators claiming the further increase to age 66 is unfair to women.
A group of around 330,000 women born during the early to mid 1950s will have to wait for two years longer before receiving their state pension.
Whilst the government did not waive from their intention to increase the state pension age, they did concede that some “transitional protections” for this group of women needed to be considered.
Delaying the state pension age increase from 2020 to 2022 would be very expensive.
Work and Pensions Secretary Iain Duncan Smith said during the debate that this move would cost the taxpayer £10bn, which would be an “unfair financial burden borne disproportionately by the next generation”.
Some interesting points were made during the debate by several MPs.
Jenny Willott MP made some important points about the benefits to women of the proposed change to a flat-rate state pension.
Whilst a group of women will have to wait for longer until they get their state pension benefits they will, on average, be in receipt of far more generous benefits following the introduction of the flat-rate pension.
Ben Gummer MP shared some longevity statistics with the House which highlighted one of the major issues for all pension benefits.
He explained that life expectancy is improving by around one quarter of elapsed time currently, so average life expectancy will have improved by 75 seconds in the five minutes it takes to read this blog.
Assuming these longevity figures are accurate, and they sounded a little stretched to us, it would suggest that the state pension age should increase by one year every four years.
In fact, there are plans to continue increasing the state pension age following the increase to age 66 in 2020.
The current law already provides for the state pension age to increase to 67 between 2034 and 2036, and to age 68 between between 2044 and 2046.
We expect to see this timetable revised, with these further age increases brought forward.
Photo credit: Flickr/TheCreativePenn
