The long-term narrowing of the longevity gap between socio-economic groups means a universal state pension age (SPA) should be retained says longevity services provider Club Vita.
Analysis of data covering one in seven UK pensioners shows that since the year 2000 life expectancy has risen by between 1.9 years for what Club Vita describes as ‘making-do/comfortable’ women and 3.1 years for hard-pressed men. Hard-pressed men’s longevity improvement is greater than the three-year rise in SPA legislated to happen over the 28 years from 2018 to 2046.
Published in response to the Cridland review of SPA, which closed last week, the research is based around five socio-economic groups that are experiencing clear differences in longevity trends, identified as ‘comfortable’ ‘making-do’ and ‘hard-pressed’ men and making-do/comfortable’ and ‘hard-pressed’ women. However it does not include that portion of the population with no pension saving at all.
In a speech in November review head John Cridland highlighted an 18-year variation between the longevity of different areas of London, and a 15-year difference in Manchester as evidence of potential unfairness between socio-economic groups. The review is charged with assessing SPA in three contexts – affordability, fairness and fuller working lives.
Club Vita head of longevity research Steven Baxter says: “The SPA was already playing catch up, but the recent data suggests that pensioners are pulling further ahead, implying more support from younger generations of taxpayers for today’s pensioners. This is bad news for inter-generational fairness.
“However there is good news on fairness between socioeconomic groups. Since 2000 there has been a reduction of the longevity gap across pensioner socio-economic groups. It has fallen from 3.6 to 3 years between ‘comfortable’ and ‘hard-pressed’ men and from 2.1 years to 1.7 years between ‘making-do/comfortable’ and ‘hard-pressed’ women.
“Health information tends to cascade through groups in society. Early adopters are often the most educated, who are most likely to be in our ‘comfortable’ group. The narrowing of the gap since 2000 may be due to the benefits of smoking cessation ‘cascading’ down to lower earnings groups. This is good news and supports retention of a universal SPa. However, if the longevity gap widens in the future then it would be fairest to sacrifice some simplicity and move to a SPa which varies depending on whether an individual has high, medium or low career earnings.
“Typically 8 months of every year of extra life expectancy are years of good health. The primary focus should be on closing social inequalities in health and improving healthy life expectancy, rather than overall life expectancy. This would also reduce health and welfare costs. Increasing SPa will then be more practical and would be happening in an environment which supports the Review’s aims of fairness, affordability and fuller working lifetimes. The Review can help shift the emphasis to health by using language like receiving State Pension for up to 1 year in every 4 of healthy life expectancy.”