Why the flat-rate state pension reform still isn't fair

If you've got a lower than average life expectancy, you'll miss out

Updated: 
exeter   june 30  j30 strikers...

From next year the state pension will be set at a flat-rate for everyone, man or woman, who has contributed the required 35 years in national insurance contributions.

The government has said it is the fairest way to provide income for people in later life but with the state pension age rising, is it really that fair?

The state pension age is increasing to 66 between November 2018 and October 2020, it will increase again to 67 between 2034 and 2036 and then to 68 between 2044 and 2046.

These are rapid rises but, as we are constantly told, not rapid enough when you look at them in the context of life expectancy. According to one neurobiologist, Colin Blakemore, the retirement age should already be 73.

Instantly calculate your pension income options

The arguments for upping the state pension age is obvious: we're all living longer and the number of old people that working age people need to support is growing. The need for intergenerational fairness means the cost of supporting our ageing population has to be borne on both sides.

However, the government's calculations on what is and isn't fair are based on average life expectancies, so is it fair if you don't have a chance of making it to the average?

Article continues below
State Pension Plan: The Winners and Losers

Unfair terms

For a person working a manual job, living in a postcode with a poor life expectancy, the value they receive from the state pension is dwindling as they are likely to spend fewer years claiming. And with the increases to that age, some may never make state pension age.

We have only just shaken off the different state pension ages for men and women (which was wholly ridiculous considering women used to retire earlier but live far longer than men) but do we need a tiered pension age that allows those who are incapable of doing their jobs in later life (such as a builder) to retire early?

Make sure you earn a top rate on your savings

Of course, it would be extremely difficult to police and more difficult to prove that someone had been a builder all their life rather than lawyer-turned-builder in order to get their pension earlier. However, it does highlight the clear inequalities that are facing our pension system today and the importance not just of increasing longevity but of increasing the number of healthy years in retirement.

In order to enjoy our retirement it is clear we're going to have to pay for it ourselves as relying on the government could mean you have to wait a very long time.

Read more:

Only state pension for 20% of women

Retiring soon? Here's how to get more state pension for free

State pension cash could run out next year: what it means for you