The party will instead commission a new review of the pension age, specifically tasked with developing a flexible retirement policy to reflect both the contributions made by people, the wide variations in life expectancy, and the different nature of working lives. For example, someone who worked in a job that involves heavy manual labour might be allowed to retire earlier that someone who has worked in an office. Someone who lives in Blackpool might have a very different SPA to someone in Kensington
Commenting on Labour’s manifesto, Malcolm Mclean, Senior Consultant at Barnett Waddingham, said; “The cost implications of Labour’s plans are enormous and as such are almost certainly unrealistic. Independent estimates have suggested that effectively capping the SPA at 66 might cost as much as £300 billion, whilst the plan for a flexible retirement age, initially considered in the recent Cridland review, was rejected as being “horrendously complicated” to implement.
“Alongside plans to review the SPA, the manifesto will also commit to protecting the pension triple lock and pensioner benefits such a free bus passes and the winter fuel allowance. There are serious question marks about the cost and long term sustainability of the triple lock in particular with both the final Cridland Report and the Work and Pensions Select Committee having recently recommended its abolition.
“However over the shorter term horizon of the next 5 years any extra cost relating to the 2.5% guaranteed underpin may be minimal (e.g today’s new CPI inflation figure increase is 2.7%) and it will be interesting to see whether for political expediency the Conservative manifesto follows suit and continues the triple lock for the duration of the next parliament.
“The manifesto also includes an intention at a cost of £0.3 billion to uprate state pensions for British pensioners overseas and extend the means-tested pension credit to those affected by changes to their state pension age since the 1995 Pension Act. In the latter respect it is perhaps significant to note that a similar proposal previously made by Labour to extend the range and scope of means-tested support to them has already been rejected as unacceptable by the Women Against State Pension Inequality (WASPI) movement. The total cost of both these measures as set out by Labour seems low on the basis of previous estimates.”
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