Response to consultation: When should the state pension age increase to 66?

EHRC response to DWP Call for Evidence

The EHRC welcomes the opportunity to respond to this call for evidence on when the state pension age should be increased to 66.

Executive Summary

  1. Most of what the Commission has to say in our submission relates to gender and the differential impact of when the State Pension Age (SPA) might be raised and the manner in which equalisation may be raised. We think the Government should also give careful consideration to the impact of any proposals on the protected areas, for example different ethnic and disabled groups, notably those who have experienced mental illness because of fragmented careers.
  2. The Commission is concerned that in some of the protected areas, for example sexual orientation, there is limited data available, which makes it difficult to predict the likely differential impacts of any proposals. The Commission would welcome the opportunity to work with Government to develop this evidence base, particularly in the context of our Triennial Review.
  3. The Commission submits that in order to take account of the European and domestic equalities legal framework, any proposals relating to the raising of SPA to 66 should:
    • Be consistent with the progressive equalisation of SPA between men and women envisaged by the Directive
    • Have a clear legitimate objective and be a proportionate means of achieving that objective
    • Favour means of achieving the objective which do not discriminate between men and women as being more likely to comply with the Convention and the Directive
    • Be developed having due regard to the need to eliminate discrimination in particular between men and women, but also in relation to all relevant protected grounds.
  4. Consideration should be given to other factors that could decrease the financial gains envisaged, such as a potential increase in the spend on working age benefits or Pension Credit claims as individuals with poor health are unable to remain in or find new employment at older ages.
  5. Rather than focusing on increasing men’s SPA and perpetuating the gap between men and women, Government should focus on how to help women and men extend their working lives, if they wish to do so, and thus reduce the disadvantage that women face in the workplace by shortened working lives. This will help increase tax revenue and decrease welfare costs.
  6. We are pleased to see that the coalition Government has committed to two key measures that will help with this:
    • The abolition of the default retirement age (DRA) from October 2011 will require changes in the world of work which will help to create the conditions that will enable and encourage older workers to remain economically active.
    • Extending the benefits of flexible working for all. Extending flexible working to older workers will enable them to balance work with their health needs and other commitments, such as caring for others or providing childcare for grandchildren. The Commission has undertaken a specific programme of work as part of our flagship project Working Better that focuses on older workers.
  7. A majority of over 50s (63 per cent) say the main factor that would enable them to achieve their ideal jobs would be a more open attitude to recruitment among employers.
  8. Many older workers remain ambitious and are seeking promotion and development opportunities. Our older workers research found more than twice as many (11 per cent) of the over 50s want promotion as want to downshift (4 per cent).
  9. Individuals and employers need to be aware of the options that are available to them, and the financial benefits of working longer.
  10. Raising the SPA may in fact have little effect on increasing high earners’ retirement ages because the top 30 per cent of earners are not dependent on state pension income in retirement. For these workers SPA is not a lever to extend working lives, and if they do not extend their working lives (thus continuing to pay greater taxes) the cost savings to the Government will be reduced.
  11. Certain groups are already less likely to be working up to or beyond SPA:
    • Men are currently less likely than women to be working beyond SPA and the men’s average age of withdrawal from the labour market is currently below men’s SPA.
    • Only 32 per cent of 60 to 64 year old people from ethnic minorities are in employment, compared to 45 per cent of corresponding White people.
    • Only 9 per cent of 65 to 69 year old disabled people are in employment, compared to 19 per cent of equivalent non-disabled people. They are also much more likely to leave employment at an earlier age than non-disabled people.
  12. Consideration also needs to be given to the financial impact of these changes on younger generations who rely on older people, grandparents for instance, to provide flexible and cost effective child care to enable them to go to work and the provision of other unpaid care, such as elder care.
  13. As part of the Government’s positive duty to ensure equal treatment between men and women, Government should ensure that there is no difference in timescale between the notice given to women of their increase in SPA under the current equalisation process and that given to men if the increase in SPA to 66 is brought forward.

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