John Cridland has published his final report on future rises in the state pension age. What does the Cridland state pension age review recommend? Here are the key points.
State pension should rise to 68 faster
Currently, the state pension age is due to rise to 68 between 2044 and 2046. It would affect people born after April 5th 1977. And anyone born after 5th April 1978 would get their state pension age 68. John Cridland recommends that the state pension age should rise to 68 between 2037 and 2039.
This would mean that anyone born after April 5th 1971 wouldn’t get their state pension until they were 68. Anyone born after April 5th 1970 but before April 6th 1971 would have a state pension age of between 67 and 68.
Triple lock should be abolished
The review recommends that the triple lock should be abolished in the next parliament (after 2020). At the moment, the state pension increases in line with earnings, inflation or 2.5% a year, whichever is greater. The review by John Cridland recommends that the state pension should increase in line with earnings.
Universal state pension age
The review recommends a single state pension age for everyone. The advantage of this is that it’s straightforward, but the disadvantage is that it doesn’t recognise that some people don’t live as long as others.
And in some cases it’s precisely those people who rely on their state pension the most who will receive it for the least amount of time. Namely, those who live in ‘low income’ areas or who do manual jobs. Women don’t always fall into this category because they do – on average – live longer than men. But women living in low income areas or those who’ve worked in stressful or physical jobs may well not live as long as the average man.
Research shows that the gap between those who live the longest and those who live shorter than average lives is widening. Having the same state pension age for everyone doesn’t acknowledge this.
Early access to pension credit
The report says that people should be able to claim pension credit, which is the main means-tested benefit for pensioners, one year earlier than the state pension age. But this would only kick in once the state pension age reached 68.
The report also says that the criteria for qualifying for universal credit should be redesigned so there’s a ‘smoother transition’ to retirement.
Ten year notice of any change
The report says that people need ten years’ notice of any change to the state pension age and that change should only happen once a decade. Ten years’ notice seems reasonable but it’s not much help if you’re unable to continue working – either because your own health won’t allow it or because employers don’t want to take on older workers. Both are still an issue for many thousands of women (and men).
A one-year increase in the state pension age in any ten-year period
The idea that the state pension age should only increase by one year in a decade shows what a completely idiotic decision it was to bring forward the rise in state pension age to 66 in 2011. Not only did this mean two rises in state pension age for women, for many thousands it meant two rises at the same time.
The report says that employers should have a plan in place to support carers in the workplace. It also recommends that carers should be given statutory carer’s leave of perhaps up to five days.
I’m disappointed that this review did not specifically highlight the fact that 95% of carers who could qualify for Carer’s Credits (National Insurance towards their state pension) are currently missing out on these. However, I am encouraged by the fact that the report says: “The Review notes that take-up of certain National Insurance credits is much lower than it could be. The Government should also take steps to ensure that people can build as much State Pension they can.”
I’ve started a petition to ask the government to do more to help carers who are missing out on vital state pension credits. Please sign my petition here.
Mid life MOT
People should have a mid-life work and pension MOT which help them to make decisions about work and pension saving.
The report points out that people who are self employed don’t get automatically enrolled into a workplace pension. There is currently a review into automatic enrolment which is looking at people who are self employed, among others. The report says that tackling the issue of pensions for people who are self employed should be a priority.
The report also recommends that the review into automatic enrolment prioritises improving pension saving for women. At the moment, you’re only automatically enrolled if your earnings from each job are £10,000 a year or more. Two thirds of part-time workers who lose out are women.
The report also says that the government could look at letting couples combine their workplace and personal pensions into a joint pot (which is currently an option in Switzerland).
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