I was speaking at FT Adviser’s Financial Advice Forum event yesterday and I was asked about what the SPa review may yield. It got me thinking about the stagnation in life expectancy increases. In 2020/22 life expectancy projections were around the same level they were at in 2010–2012 for females, and slightly lower for males, though there has been a small increase since then. So what does this mean for state pension age increases? The Government would like to aim for people to spend the same average proportion of adult life in receipt of the State Pension (30%-32%) so, presumably, increases in longevity should lead to increases in SPa. But does that mean that if projections stall or even reduce, the SPa should stay the same or go down?
We know the government won’t reduce the SPa, but in times of slow life expectancy increases, this puts people in a tricky position. Those most affected — people on low incomes, in manual jobs, or with disabilities or caring responsibilities — are hit hardest by a rising or even stagnant SPa, particularly if their life expectancy is lower than expected. These people are more likely to leave work before SPa and wait longer for a decent basic income, and will also spend below the average amount of time in receipt.
So, this SPa review needs to think seriously about mitigation. John Cridland’s excellent 2017 Independent SPa review identified carers as a key group of vulnerabiltiy, and suggested that carers could be eligible for Pension Credit prior to SPa. This would ensure carers don’t have to live on a very low income before reaching SPa, when they cannot work due to caring responsibilities. Caring at older ages particularly affects women, who are more likely to provide unpaid care than men at all ages. Pakistani and Black African carers tend to provide more hours of care per week than people from other ethnicities. This means any mitigation strategy must grapple with the intersection of gender, ethnicity, and socio-economic status rather than treating “carers” as a single group.
This review is not just about managing numbers on a Treasury spreadsheet. It’s about what the State Pension represents. If it becomes a benefit that only the healthiest and wealthiest live long enough to enjoy, it risks losing its legitimacy. The government must balance fiscal sustainability with social justice. That may mean slowing down SPa increases, introducing targeted mitigation, and above all, acknowledging that averages conceal profound inequalities. If the SPa is to rise again, it must rise alongside policies that ensure no one is left behind.
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