Scots may get state pension before the English

The review of the state pension age announced yesterday is fairly certain to establish the next date for the state pension age to rise, but John Cridland (pictured), who is leading the review, may not stop there. He will look at other potential changes - which could lead to Scots retiring before the English.

Part of the review will be to look at future increases in the state pension age, which in the past has been linked to life expectancy. Given the high differences in life expectancy in poorer and more affluent areas, Age UK has called for this to be reflected in retirement ages.

The SNP has pointed out that on average boys born in Scotland in 2013 are expected to live to the age of 77.1, while those born in the UK as a whole will live to the age of 78.9. Girls in Scotland, meanwhile, will live to the average age of 81.1, compared to 82.7 in the UK as a whole. It is therefore, urging Cridland to consider an earlier state pension age in Scotland. In the House of Commons, Iain Duncan Smith confirmed that this would be considered as part of the review.

Pace of change

Commentators expect the review to revisit the current timetable for increases in the state pension age. The government has made it clear that it will not alter the existing timetable up to 2028, when the state pension age rises to the age of 67 - this means those aged over 55 are unlikely to be affected - but the rest is up for grabs.

So far the government has established a timetable to raise the state pension age to 68 by the mid 2040s, and the Office for Budget Responsibility has suggested that it will then need to rise to 70 by the age of 2050.

However, many commentators expect the government to accelerate the pace of the rise to 68 and beyond, so that those joining the workforce today will have to wait for their mid-70s before they can retire.

Variety of retirement ages

The review isn't just looking at straightforward increases either. The remit is also to establish whether the system of a single universal pension age, rising in line with life expectancy, is "optimal in the long run". This will mean looking at whether different groups should have different retirement ages.

There has been speculation that Cridland could recommend basing state pensions on people's working lives. It could mean that those who work in manual jobs - who could not be expected to continue for as long as those based at a desk - could receive their state pension earlier.

It could also mean that those who go to university - and start work at least five years later than those who leave after GCSEs - could be made to wait longer for their state pension.

Another possibility is the introduction of a state pension age range, where people can choose their state pension age - with those retiring earlier doing so on a lower pension. This could also include an ill-health pension for those who have not yet reached their state pension age, but are not well enough to work.

The review will not conclude until May next year, so we will have to wait to see the effect on our state pensions.

Alternative

Meanwhile, there's an alternative interpretation of the review's remit. David Robbins, a policy expert at Willis Towers Watson, has suggested that individually calculating state pension ages based on risk factors would be too difficult, and too unpopular.

Instead, he says that the real purpose of the review lies in the way it has been worded. It will look at "whether the current system of a universal SPA rising in line with life expectancy best supports affordability, fairness, and fuller working lives objectives". This gives it scope to suggest that pension ages may not have to rise in line with life expectancy - which would let the government hike it faster.

But what do you think? Would you like to see pension ages varying around the UK? And do you think the government would try it? Let us know in the comments.