Responses And Submissions

PPI Analysis for the Independent State Pension age review

Following on from PPI projects: State Pension age Mitigations and The Distributional Impact of State Pension age Rises, the PPI conducted further analysis to feed into the second stage of the SPa review. The topics covered are summarised below.

Proportion of life spent in receipt of the State Pension viewed as a mean and a median under different State Pension ages

A summary of conclusions from this analysis:

• Under the legislated approach to increases in State Pension age, the distribution of people receiving state pension for more than and less than a third is not always even.
• The proscribed approach to increasing SPa may leave over half of people reaching SPa in a certain years not spending a third of their life in receipt of the state pension.

That analysis was set out in our Briefing Note 91 How long will people spend in receipt of the State Pension?

Briefing Note 91 - How long will people spend in receipt of the State Pension?

Contributions into the State Pension system versus receipts for people of different income and employment profiles

A summary of conclusions from this analysis:

• Younger people’s lifetime NIcs will constitute a greater proportion of the amount of State Pension they will receive than older people.
• The lifetime NIcs of those on lower incomes constitute a lower proportion of State Pension income than those on higher incomes.
• Those in receipt of NI credits and the self-employed will pay a lower proportion through contributions of what they will receive in income from the state pension.

This analysis is available in our note Contributions into the State Pension system versus receipts for people of different income and employment profiles

Contributions into the State Pension system versus receipts for people of different income and employment profiles 

The policy of allowing people with 45 years of National Insurance contributions to claim a full State Pension prior to State Pension age

In 2016 the PPI conducted analysis based on 2013 DWP data for the amount of NI qualifying years people have at retirement, and the approximate cost of allowing those with 45 years of NIcs to retire before SPA. 

That analysis was set out in our Briefing Note 83 How could the effect of rises in SPa be mitigated for the most vulnerable?

Briefing Note 83 How could the effect of rises in SPa be mitigated for the most vulnerable?

Period vs. cohort life and healthy life expectancies

• The potential to project the healthy life expectancy of individuals using current measures has concluded that:
• Different approaches to data gathering may result in different estimates for future life and healthy life expectancies, particularly when health status is self-reported.
• It is important to use a life or healthy-life expectancy that applies both to either the individual or population and at the correct time period.
• It is not possible to calculate adequately robust cohort equivalent health estimates with any level of confidence due to the complexities of projecting changes to morbidity rates. This is not helped by a lack of information regarding co-morbidity and an assessment of the potential improvements in healthcare and treatment of particular conditions.

That analysis was set out in our Briefing Note 90 What is the best measure of how long people might live?

Briefing Note 90 What is the best measure of how long people might live?