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Presentation and discussion on change to female state pension age

Presentation and discussion on change to female state pension age. Jamie Jenkins. 1. Outline. Explain what is happening to the female state pension age between 2010 and 2020. The impact of the change on Labour Market outputs. Options for managing the change in the female state pension age.

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Presentation and discussion on change to female state pension age

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  1. Presentation and discussion on change to female state pension age Jamie Jenkins

  2. 1. Outline • Explain what is happening to the female state pension age between 2010 and 2020. • The impact of the change on Labour Market outputs. • Options for managing the change in the female state pension age. • Comments from user consultation. • Summary statistics. • ONS preferred option • Other issues. • Summary • Questions

  3. 2. State Pension Age 2010  2020 • At the moment, men get their State Pension at 65, and women get it at 60. • This will change from 6 April 2010 so that by 2020, both men and women will receive their State Pension at 65. • Women's State Pension age will be raised according to the year they were born. It will increase by one month every two months between 2010 and 2020 .

  4. 3. Why is this important for ONS? • A number of key statistical outputs are presented based on people of working age (16-59 women & 16-64 men): • Headline employment rate • Headline inactivity rate Published in the Labour Market Statistics First Release - http://www.statistics.gov.uk/StatBase/Product.asp?vlnk=1944 • Some other outputs • Government Public Sector Agreement targets • Parliamentary questions • Economic and Labour Market Review Articles • Ad-hoc requests • Household analysis of work and worklessness amongst households

  5. 4. Moving forward • Consultation taken place with • Central Government • Devolved administrations • Central and Local Information Partnership (CLIP) members • Presented a range of options to manage the change in the female state pension age • Comes down to two options…

  6. 5a. Option 1 • Gradually change working age definition to mirror movements in female state pension age. • Strictly follow the change in the state pension age so that the upper female age limit will increase by one month for every two months over a ten year period from 2010 to 2020. • Similar to 1. but change the upper age limit less frequently than once every two months – perhaps once a year. Issues include: • Frequent changes to production systems • Presentational issues with definition changing frequently • Confusion for users

  7. 5b. Option 2 • Move to present statistics based on people aged 16-64. • ONS would move away from using the term working age which is the current practice. • A variation would be to continue to publish statistics based on 16-59/64 and move to 16-64 in 2020. Issues include: • The headline employment rate would reduce upon the change (a consistent back series would be available). • Potential for the employment rate to increase over the ten years as more women would make themselves available for employment as a consequence of a change in state pension eligibility. Other: • Should the state pension age be used as a driver for determining employment as more people work longer beyond state retirement.

  8. 6. Consultation views • Consultation brought a number of varied opinions • Most popular was not to track the change in the SPA and move to 16-64 based statistics in either 2010 or 2020, with the former the more popular. • Moving straight to 16-64 would bring the UK closer in line with the current international harmonised definition which is 15-64 (the LFS does not collect information on the employment status of 15 year olds). • Tracking the change in SPA would be difficult for users. • Public consultation will now take place – details to be issued shortly

  9. 7a. Summary statistics

  10. 7b. Summary statistics

  11. 7c. Summary statistics • More and more women aged 60 to 64 are working. • 1992 – 22.8 per cent in employment • 2008 – 34.1 per cent in employment Employment rate of women aged 60-64, April to June each year from 1992 to 2008: not seasonally adjusted.

  12. 8. ONS preferred option • Replace working age headline statistics with those based on people aged 16-64. • Introduce this in the Labour Market First Release in 2010. Reasons: • An upper age limit of 64 for both men and women conforms to international practice. • State pension age is not the only factor which determines when people stop working. • Eg. Pension provision – improvements to life expectancy • Less confusion for users with the definition changing frequently over the ten year period. • Additional analysis mirroring movement in the female state pension age between 2010 and 2020 will be made available.

  13. 9. Other things to note. • The State Pension age for both men and women is then set to increase from 65 to 68 between 2024 and 2046, with each change phased in over two consecutive years in each decade. • This change will be managed at a later date.

  14. 10. Summary. • The state pension age will be changing for women between 2010 and 2020. • Impacts on ONS outputs that are based on working age. • ONS preferred option is to move in 2010 to publishing headline statistics based on a definition of 16-64 for both men and women. • Public consultation will take place until February 2009. • Contact – Richard Clegg, Office for National Statistics, Room 1.262, Government Buildings, Cardiff Road, Newport, Gwent NP10 8XG. Email: richard.clegg@ons.gov.uk

  15. Questions? Jamie Jenkins

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