Independent Scotland May Scrap Plan to Raise Pension Age to 67Peter Woodifield
Scotland may resist plans by the U.K. to raise the state pension age to 67 by 2028 should the country win independence, the Scottish government said today.
Scottish pensioners will also get stronger guarantees on pension increases than the U.K. is planning for at least the first parliament after independence, the government said in a policy paper published today. There would be better protection for pensioners on low incomes and those relying on a state pension based on their spouse’s contributions, it said.
“The rapid move to 67 is a concern,” the government said in the paper. “On average, Scots currently enjoy fewer years in retirement than the U.K. average due to lower life expectancy. A precipitate move to set the state pension age at 67 will reduce still further the number of years that Scots, on average, receive the state pension.”
The proposal is part of a series on what the government in Edinburgh would do should the country opt for independence, the flagship policy of the semi-autonomous administration run by the Scottish National Party. A referendum on whether Scotland should quit the U.K. will be held on Sept. 18 next year. All major opinion polls showing more voters want to keep the status quo than leave the 306-year-old U.K.
Aging populations and falling birth rates are forcing developed countries to raise the state retirement age to cut the rising costs of pension benefits. The U.K. originally proposed to increase the pensionable age for men and women to 66 by 2026 and to 67 by 2036. Now, it will be 2020 for 66-year-olds and between 2026 and 2028 for 67-year-olds.
The cost of not raising the state pension age to 67 from 2026 is an estimated 6 billion pounds ($9.6 billion), according to the Department for Work and Pensions in London.
“Pensions spending per head is already higher in Scotland than in the rest of the U.K.,” the department said in a statement e-mailed yesterday. “In future Scotland will have a higher proportion of elderly people.”
The proportion of the Scottish economy spent on pensioner benefits is projected to rise to 10.6 percent over the next 50 years from 7.1 percent. In the U.K. as a whole it’s forecast to rise to 9.4 percent from 7.1 percent, according to DWP data.