William Pett discusses the idea of linking pension age increases to social care funding. 

There was widespread protestation amongst the young and middle aged last week following the publication of two controversial reports commissioned for the Department for Work and Pensions. One suggests that workers under the age of 45 may have to work a year longer, to 68, with the other proposing that those under the age of 30 may not be entitled to their state pension until they are 70.

Whilst the government is not set to make a decision on both recommendations until May the condemnations have begun already, with critics excoriating the unfairness of shifting the goalposts, yet again, on pensions. Steve Webb, the former pensions minister, stated that: "It is one thing asking people to work longer to make pensions affordable, but it is another to hike up pension ages because the Treasury sees it as an easy way to raise money."

But why shouldn't the Treasury do exactly that?  In 2016, pensions accounted for 20 per cent of public expenditure, which is up from 17 per cent in 2011. This equated to spending on education, defence and transport combined. Whilst the ageing population (thanks, baby-boomers) is the main factor behind this increase, some of the blame for spiralling costs should be levelled at the coalition government, and specifically at unsustainable policies such as the 'triple lock'. Introduced by Webb himself in 2010, this has guaranteed an annual state pension increase to match inflation, average earnings or 2.5 per cent – whichever is highest.

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Putting aside what is politically expedient for the government and opposition parties, none of which dare to upset the ever-growing pensioner (or indeed 'near-pensioner') demographic, it is surely time to look at how we can improve the sustainability of pension spending and, dare I say it, even assess how savings in pensions could be used elsewhere.  The UK is currently facing a crisis in social care funding: across the country local authorities cannot afford to pay care providers, the growing shortage of carers means that thousands of elderly patients are languishing in hospital beds despite being fit enough to leave, and 1.2 million over-65s with care needs are living without help.  Why not use incremental (but quicker) pension age increases to give the social care sector the funding it so desperately needs?

The UK's state pension age (SPa), currently set at 65, is around average when compared to other OECD countries. Under current legislation this is set to be raised to 67 by 2028, yet this is what the SPa already is in countries such as Norway and Greece (despite both having a lower average life expectancy than the UK). Critics will argue that the amount received through the state pension in the UK is low, which is true, but I believe for that reason we need to insist that workers in the UK continue to contribute to the economy, and indeed to their own private pension pots, for as long as they are able.

With one in five millennials expected to live to see their 100th birthday, it is surely right that people are expected to work for far longer. Whilst there are state pension age increases planned over the coming decades, my question, and indeed the question posed by the two reports published last week, is are the planned increases big enough and are they taking place soon enough? There will be 'losers' whenever there are increases and admittedly to bring forward the planned changes would be tough for the middle aged to stomach. But whilst it is a somewhat radical move, bringing forward the increase of the SPa to 67 even by 5 years could constitute a much-needed long term solution for social care funding, and one that would have the advantage of most immediately benefiting the very people who 'lose out'.  It would also by its very nature be a progressive policy; the raise in the SPa would be universal but those most dependent on social care services, i.e. low income households, will stand to benefit most.

Scepticism of politicians and government is still exceptionally high in the UK, and so any such move would require transparency in demonstrating that money raised through SPa increases is in fact going directly towards funding the health and social care system. However, this is by no means impossible.

Perhaps we may not be saying this towards the end of our careers but I believe that most of the millennial generation is prepared, and indeed expects, to work until we are 70.  Certainly, if it is a choice between a lower pension age or a properly funded social care sector, I know which one I would choose.
William Pett is a health policy and communications consultant at MHP Health.

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