State Pension Age: Evidence submitted to Independent Review

From: Shirley-Anne Somerville, Cabinet Secretary for Social Justice

To: Dr Suzy Morrissey

 

Dear Dr Morrissey

INDEPENDENT REVIEW OF STATE PENSION AGE

Thank you for the opportunity to provide evidence to inform the outcome of the State Pension age review, which you are conducting on behalf of the Secretary of State for Work and Pensions.

I note the Terms of Reference for the review and in particular the focus on intergenerational fairness, sustainability and long-term affordability, but also the need for wider considerations to be taken into account, such as assessing impacts on different groups of people across regions and nations.

Here in Scotland, both men and women have a lower average life expectancy at the current State Pension age of 66. On average 66 year old men are expected to live around 1 year less, and 66 year old women expected to live almost 1 and a half years less in Scotland, when compared with their counterparts in England and, to a slightly lesser extent, Wales and Northern Ireland. Inequalities in life expectancy, including healthy life expectancy, within the population are significant in Scotland, as indeed they are in other parts of the UK.

Reducing poverty and inequality therefore remains the best way of improving life expectancy as highlighted in our Population Health Framework – which sets out Scottish Government's and COSLA’s long-term collective approach to improving Scotland’s health and reducing health inequalities for the next decade.

Nonetheless, it is important that current variations in life expectancy are highlighted in your review to ensure that any potential changes do not penalise those who have made similar contributions over the course of their lives.

Of course, there are challenges around demographic changes. Between 2022 and 2047 Scotland’s population of pensionable age citizens is projected to rise by almost 34% from 1 million to 1.4 million, after accounting for current scheduled state pension age increases, while the number of children is projected to decrease by around 9% over the same period.

However, the Scottish Government estimates that around 160,000 people over pension age in Scotland live in relative poverty, after housing costs.[1] Pensions inequalities mean that women, people with multiple low pay jobs, disabled people, minority ethnic communities and people who are self-employed all face lower pension incomes in retirement.

Given these wider considerations, you will understand that the Scottish Government does not want to see any changes that do not fundamentally consider Scotland’s unique challenges. Now, more than ever, older people want to engage with and contribute to communities, access public services and enjoy financial security – the three overarching themes in the Scottish Government’s Fairer Scotland for Older People framework – and it is important that pensions provision properly supports delivery of those objectives.

In Scotland, our Pension Age Disability Payment and Pension Age Winter Heating Payment are delivered by Social Security Scotland and do much to support our older people. Any changes to the State Pension age could have an impact on people in receipt of this support, which highlights the importance of this review considering the wider impacts for devolved nations.

Further, any review of the state pension age must address previous mistakes and ensure justice for women born in the 1950s. Although the UK Government acknowledged their mishandling of this, there has yet to be any compensation paid to the WASPI women despite pressure from both stakeholders and the Scottish Government. It is vital that this review ensures that any changes are communicated clearly and fairly, so that similar distress is not repeated.

I look forward to meeting with you to discuss this further on 18 November. I am sure that Scottish stakeholders will also add useful information when you meet with them on the same day.

 

[1] Poverty and Income Inequality in Scotland 2021-24