Work and Pensions written question – answered at on 12 October 2011.
To ask the Secretary of State for Work and Pensions if he will estimate the savings to the Exchequer which would arise from bringing forward the proposed increase in the state pension age to 67 years to (a) 2026, (b) 2030 and (c) 2032.
Increasing the state pension age to 67 by:
(a) 2026 would produce estimated savings in DWP benefit spend of £70.4 billion between 2024/25 and 2035/36;
(b) 2030 would produce estimated savings in DWP benefit spend of £46.2 billion between 2028/29 and 2035/36;
(c) 2032 would produce estimated savings in DWP benefit spend of £32.0 billion between 2030/31 and 2035/36.
All estimates are in 2011/12 price terms and rounded to the nearest £100 million.
Notes:
1. The savings estimates presented are calculated in line with the methodology used to prepare the estimates of DWP AME savings published in the impact assessment presented with the Pensions Bill 2011. They take into account lower spending on pensioner benefits and higher spending on working age benefits and incorporate changes to long term assumptions following the publication of the Office of Budget Responsibility's July 2011 Fiscal Sustainability report.
2. The estimates are based on the current welfare system. Reliance on income-related pension benefits and working age benefits is assumed to remain in line, with current age-specific rates of reliance.
3. A baseline of the state pension age reaching 66 by April 2020 is assumed with an increase to 67 between 2024 and 2026. The brought forward increases to 67 occur over a two-year period.
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