Scots pensioners ‘short-changed by Westminster’

RETIRED Scots in the country’s poorest areas are losing out on their state pension to the tune of £50,000, compared with better-off areas of the UK, the SNP government has claimed.

There is demand to keep the retirement age lower than the rest of UK. Picture: Ian Georgeson
There is demand to keep the retirement age lower than the rest of UK. Picture: Ian Georgeson

Pensions secretary Shona Robison said older Scots were being “short-changed” as they died younger and did not collect as much as those who lived longer. She called for a lower retirement age north of the Border to be considered. Westminster plans to raise the state pension age to 67 in 12 years.

Comparing Glasgow with Harrow, which has the highest life expectancy for men in the UK, the pension gap is £50,000. When comparing Glasgow with Camden in London, which has the highest life expectancy for women in the UK, the pension gap is £46,000.

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But Ms Robison’s statement prompted a furious reaction from opponents, who accused the SNP of complacently accepting the fact Scots died younger and building the pension system around this – instead of addressing the country’s dire health inequalities.

A Scottish Government analysis paper entitled Life Expectancy and the State Pension shows men and women who have the same state pension entitlement will collect less in Scotland than in the rest of the UK.

The payment level is the same. But a 65-year-old woman entitled to a total pension of £160 a week could expect to get about £11,000 less in Scotland. This is because her average life expectancy is 84.4 years, compared with 85.7 in the UK.

The figure for men is £10,000 less – because they are expected to live to 82 instead of the 83.2 UK average.

Ms Robison, the newly appointed Cabinet secretary for pensioners’ rights, said: “This research makes clear that Scots are already short-changed when it comes to pensions. If we stay tied to the Westminster pension and welfare system, and the state pension age rises at the same pace in Scotland as in the rest of the UK, the risk is that this problem will be compounded.

“The lower life expectancy in Scotland means it would be fairer for people in Scotland if the increase in the pension age was postponed. That is why it is right for Scotland to consider a state pension age relatively lower than the rest of the UK.

“I am concerned about Westminster’s accelerated timetable for increasing the state pension age to 67 as it so unfairly disadvantages Scots.”

But Greg McLymont, Labour’s shadow pensions secretary, said: “The Scottish Government should be ashamed and immediately apologise for insulting the intelligence of Scots. The Nationalists want to make this a Scotland v England contest.”

Latest figures from the Office for National Statistics show life expectancy at birth and at 65 in Scotland is higher than it has ever been – but it is still the lowest in the UK.

Opposition leaders say the SNP has ignored the fact that Scotland’s population is ageing at a faster rate than the rest of the UK, which will place growing pressure on the ability to pay pensions.

They claim the best way to deal with this pressure is to pool resources with the other parts of the UK.

Scotland already sees £100 per head more spent on pensions than in the rest of the UK.

Scottish Conservative deputy leader Jackson Carlaw said: “The Scottish Government is disgracefully trying to shoehorn this into a Scotland v England debate, in the hope it will generate some more animosity and boost the Yes vote in September.

“But the fact is inequality exists across the board and, as we know, the life expectancy gap between rich and poor in Scotland is vast too.

“The electorate will see through this ill-informed and divisive narrative.”

Scottish Liberal Democrat spokesman Jim Hume said: “People are dying earlier in Scotland and the first instinct of the Nationalists appears to be to hit the calculator to work out how much pension they will miss out on.

“Most people will think the bigger priority is working out how we can help more people live longer, healthier lives with their families.”

Pensions are currently reserved to Westminster, where plans to raise the state pension age to 67 from 2026 have been unveiled by the coalition government.

The Department for Work and Pensions said delaying the increase in the pension age to 67 could cost an independent Scotland an additional £6 billion between 2026-27 and 2035-36.

Chief Secretary to the Treasury Danny Alexander said: “The truth is that an independent Scotland would struggle to meet the cost of implementing the new flat-rate pension the UK government is introducing – as their own finance minister John Swinney acknowledged in their own secret, leaked paper.”

He went on: “In the coming weeks, the government will publish its analysis on the impact of declining oil revenues and an ageing population on an independent Scotland and show that spending on Scottish pensions, benefits and other public services is more affordable as part of the UK. The Scottish Government should put in place a decent policy and do something about why Scottish people don’t live as long as people in the rest of the UK.”

The Scottish Government has already confirmed it will establish a commission to consider the appropriate pace of further change to the retirement age beyond 66. This will report to the Scottish Parliament within the first two years of possible independence.

Deputy First Minister Nicola Sturgeon said spending on “social protection”, which includes pensions and welfare, was “more affordable in Scotland than in the rest of the UK – and has been lower for the last five years”.

She added that the National Institute of Economic and Social Research had suggested “individual pensions in Scotland are between 6 per cent to 8 per cent cheaper compared to the rest of the UK”.