Government hikes in the State Pension age will exacerbate social inequalities and could lead to more people giving up work early, due to greater health and care needs and caring responsibilities, according to a new report published today.
A new report from the International Longevity Centre UK (ILC) draws attention to international research which suggests that state pension reforms risk exacerbating inequalities, rather than alleviate them.
The research reveals that those best placed to benefit from state pension age increases are more highly educated, more highly skilled, and better paid.
Meanwhile, the policy is likely to disadvantage women and low-skilled workers and could lead to involuntary early exit from labour market.
The research warns that with the increase of state pension age and the move to contribution-based pension schemes, women with lower education in the UK are set to lose up to 25% of their monthly pension entitlements.
ILC’s report highlights how other countries have been able to introduce reforms to state pension without worsening social inequalities to the same extent as the UK.
The ILC has called on the Government to learn from these examples, by providing a reliable basic pension component to reduce the risk of social inequalities when pension ages are adjusted in line with average longevity.
Dr Brian Beach, Senior Research Fellow at the ILC, said: “Linking the pension age to average life expectancy is a route to increasing social inequality.”
“There is a need for wider approaches to encourage work in later life beyond reforms to pensions, including measures to address health and wellbeing at work, to tackle age discrimination in the workplace, and to support those juggling work and caring.”