Postcode divide in state pension, says TUC

Older woman using computer A growing number of older people are choosing to work beyond state pension age

Huge variations in life expectancy create a "postcode divide" in state pension entitlement, a report by the TUC has claimed.

The union organisation said that the inequality would get worse as the state pension age increased.

The state pension age is being equalised for men and women. It is rising to 66 for both sexes by 2020, then to 67 by 2028.

The government said the state pension needed to change to be sustainable.

'Divide'

Those who qualify for a state pension currently start to receive payments in their 60s. People can look at a state pension calculator to find the age at which they will receive it.

A study of England by the TUC showed that women in their late 40s living in East Dorset - which has the longest post-65 life expectancy for men and women - could expect to live nine years longer than a woman in Corby, the area with the shortest female post-65 life expectancy, when they retired.

It worked out that the difference was worth £67,000 over a lifetime.

The divide for men living and East Dorset and Manchester - the area with the shortest male post-65 life expectancy - would be £53,000.

The TUC said that this situation could worsen as the government increased the state pension age, and was introducing a five-year review of the state pension age from the next Parliament.

Start Quote

Women tend to rely on their state pension more than men do, because they have less by way of workplace or private pension savings”

End Quote Sarah Pennells SavvyWoman.co.uk

"The government's decision to accelerate the rise in the state pension age will mean millions of people having to work for longer in order to receive less in retirement," said Frances O'Grady, the TUC general secretary.

"It cannot be right that people living in a wealthy area can receive tens of thousands of pounds more in state pension than someone living in a less well-off part of the country, particularly as richer people are likely to have earned more during the career and have a bigger private pension too.

"The government should abandon its plan to raise the state pension age in light of the new evidence on projected life expectancies. It should instead set up an independent commission to examine health inequalities and the impact on people's expected retirement incomes."

Sarah Pennells, founder of the Savvy Woman personal finance website, said that the state pension should reflect differing life expectancies.

"Women tend to rely on their state pension more than men do, because they have less by way of workplace or private pension savings, and so are disproportionately affected by any delay in the payment of it," she said.

But a Department for Work and Pensions spokesman said: "Life expectancy is rising across the whole of the UK and we need a sustainable state pension system.

"Future rises in the state pension age will be independently reviewed, taking in a range of relevant factors.

"These are expected to include variations in healthy life expectancy, variations between different socio-economic groups, regional variations and wider economic considerations."

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