e UK Government is lying about the state pension age.

MPs recently debated a petition to reduce the retirement age to 60 for everybody. During the debate MPS repeatedly cited the principle that people should be able to spend the final third of their life in a dignified retirement, the implication being that the state pension should allow this.

The elephant in the room is that the UK government proposes to raise the state pension age to 68 from 2044. The final third principle implies that life expectancy should be 102 by then, a figure that seems unattainable. Even the figure of 100 years by 2038 seems unattainable based on present figures. The final third principle also affects the old pension age figures of 60 for women (life Expectancy 90) and 65 for men (life expectancy 97).

It seems the government have quietly abandoned the final third principle, along with all the other principles it has abandoned in the last twelve years. Part of this is ideological hatred of state provision for anything and part of it is a desire to move pension provision to the private sector, thus combining ideology with a desire to make a profit for their members and donors.

Problems with the final third principle

The final third principle sounds good in theory, but problems arise when defining life expectancy and when and how to raise the state pension age. The government has remained silent about these.

Life expectancy can be defined as the mean age at death.

If the arithmetic mean is used the question is whether to set life expectancy to the mean or to one of the tails of the distribution of the age at death. The distribution is probably not symmetrical about the mean.

If the median is used then half the population will die before reaching the median age and half after.

If the mode is used most of the population will die at that age. It is economically, if not politically beneficial to the government to set life expectancy well above this figure and to adjust retirement age accordingly.

Another problem is that life expectancy varies within the United Kingdom. The figure is much lower in Glasgow, for instance than in London and this cannot be put down to drug addiction as London too is plagued by drugs.

All these problems can be solved with careful joined up thinking.

Life expectancy and retirement age.

Macrotrends.net, which has the virtue of not being dependent on the UK government for its existence, say life expectancy in the UK has been increasing by 0.15% per year and is 81.77 years in 2023, This would suggest a retirement age of 54. Even the figure touted by the government funded office of national statistics of 79.3 for females and 83.8 for males in 2020 suggest a retirement age, based on the final third rule of around 56 years old.

The Macrotrend figures suggest a growth in life expectancy of around 5 days a year and suggest that by 2044 life expectancy will be around 87 years.

The government proposal to raise retirement age to 68 from 2044 implies a life expectancy of 102 at that time. This seems seriously unachievable. Rough calculations based on Macrotrends suggest a life expectancy of 102 will be achieved in about 120 years. A much faster growth in life expectancy would be needed for the predicted life expectancy.Even the current retirement age of 66 implies a life expectancy around 100 years.

More seriously, it seems the government is basing the retirement age not on current life expectancy but on the life expectancy of people not yet born: increasing the state pension age to 68 will not impact people born in 2044 but people born in 1977.

The Wrap

The calculations used are fairly simple: nobody needs to study mathematics to the age of 18, as current Prime Minster Rishi Sunak would like, in order to understand the calculation. It could even be understood by Tory MPs who have an understanding of arithmetic limited to adding a zero or two to their expense claims and checking they have put it on the correct (more lucrative) side of the decimal point.

The final third principle suggests that the first third of life should not be spent working but learning or otherwise enjoying life. A retirement age of 66 would suggest that entry to the workforce be delayed till the age of 33, which is unlikely to happen.

The UK government have abandoned the final third principle basing the setting of the retirement age on suspect figures and assumed a rate of increase in life expectancy much greater than has been observed recently.

The government is lying to the people using faulty statistics and implausible assumptions, probably in order to boost the private pension industry.