UK state pension age reforms set to exacerbate social inequalities

  • New report suggests that state pension reforms have the potential to make social inequalities worse
  • The report from the International Longevity Centre UK compared pension reforms across five countries
  • Co-authored by Professor Alan Walker from the University of Sheffield, the report highlights how increasing the pension age could harm older women in particular

Pension

A new report from the International Longevity Centre UK (ILC) highlights international research from the EXTEND project confirming that state pension reforms have significant potential to exacerbate social inequalities.

Research from the EXTEND project, co-authored by Professor Alan Walker from the University of Sheffield, shows that those best equipped to take advantage of increased state pension age are more highly educated, more highly skilled, and better paid.

For disadvantaged workers, the current extending working lives agenda could lead to involuntary early labour market exit, due to greater health and care needs and caring responsibilities.

This threatens to create new gender inequalities, as the majority of domestic work and unpaid care work is undertaken by women, they may struggle to reconcile longer working lives with caring responsibilities.

Alan Walker, Professor of Social Policy and Social Gerontology at the University of Sheffield and co-author of the report, said: “Our research shows that increasing pension age in line with life expectancy is a very blunt instrument that exacerbates inequality and particularly harms older women. If other EU countries can manage the demographic transition without these negative effects why can’t we?”

Research from the EXTEND project reveals that with the increase of state pension age and the move to contribution-based pension schemes, women with lower education levels in the UK may lose up to 25% of their monthly pension entitlements under the new system compared to before.

Dr Brian Beach, Senior Research Fellow at ILC, said: “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.”

Comparing pension reforms across five countries, the report shows that other countries have implemented reforms to state pension without exacerbating social inequalities to the same extent as the UK. EXTEND analysis found that in systems with a strong, reliable basic pension that does not depend on contributions, the increase in social inequalities associated with increasing state pension ages is less marked, thus providing greater social sustainability.

As such, ILC calls on government to draw on examples from other countries to reduce the risk of social inequalities when pension ages are adjusted in line with longevity increases. ILC calls for greater support of workers’ health and wellbeing through job and retirement flexibility, as well as support in the management of illnesses and caring responsibilities.

Additional Information

The University of Sheffield

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Contact

For further information please contact:

Emma Griffiths
Media and PR Assistant
The University of Sheffield
0114 222 1034
e.l.griffiths@sheffield.ac.uk