View the article online at http://citywire.co.uk/money/article/a872142
MPs vote to help women hit by state pension age rises
Women born in the 1950s who did not know the government had raised the pension age twice need financial assistance, say MPs.
MPs have called for transitional arrangements to help women hit by a double-whammy of state pension age rises.
In a House of Commons debate lasting more than three hours, MPs described the hardship faced by their constituents who had seen their state pension age rise from 60 to 65, and then to 66.
Legislation for the first rise was passed in 1995 and sought to equalise male and female pension ages. The second change was brought about in 2011 after the Lib-Con coalition government linked the state retirement age with increasing life expectancy.
The crux of the issue for women affected – ie, those born in the 1950s – is the lack of communication from government. Many believed they would still retire at 60 and found too late that their new retirement age would be 66.
The campaigning women call themselves 'Waspi' or Women Against State Pension Inequality.
Mhari Black, the Scottish National Party (SNP) MP who raised the motion that enabled the debate, said the women had been ‘shafted’ by the government.
‘Women were not notified,’ she said. ‘It wasn’t reported and they weren’t given enough time to make the appropriate arrangements.’
£30 billion remedy
While the Waspi campaign has said it is not against equalisation, it has said called for compensation for women who have not had time to plan for swift rises in the state pension age.
It has been estimated that the cost of allowing affected women to retire at the pre-1995 age of 60 would be £30 billion.
Black said: ‘I fully understand the question; where are you going to find the money? But I refuse to believe it’s going to come out of the pensions of older women.’
She added that in 1995 pension legislation required the government to give individuals 10 years’ notice of pension changes but in the 2011 changes some women were given just five years’ notice, which is not enough time to plan.
The government has said it informed women of the changes in writing but many of the Waspi women said they had not received the letters. There is some debate over how many letters were sent or received.
Black said just 43% of women were aware of the planned changes but this figure was disputed by Conservative MP Richard Graham who cited a 2004 Department for Work and Pensions survey that showed three-quarters of women aged 45 to 54 were aware.
In the wide-ranging debate, in which 26 MPs made speeches, they all came down to the underlying point: fairness.
Labour MP George Howarth said he had received letters from constituents who would miss out on ‘over £35,000’ of state pension with ‘disastrous consequences’.
‘There is a basic unfairness…that needs to be addressed. And into the bargain there is a broken contract between the state and these women who are affected,’ he said.
He added that Waspi understood the inequality of having a different state pension age for men and women ‘but object to the unfair way that this was handled, creating more issues of inequality in to the process. Future generations will be given 10 years' notice of changes’.
While there was broad support for the 1950s-born women, not all politicians agreed they should be given support. Some argued that transitional arrangements had already been put in place in 2011 when the government agreed to a maximum increase of 18 months rather than two years, which cost £1.3 billion.
Young shouldn't pay
Conservative MP Marcus Fysh said it would be unfair on younger generations if they had to shoulder the cost of concessions to older women. He described those in their 20s and 30s as ‘packhorses’ who ‘shoulder the burden’ of student debt, lack of occupational pensions and rising rents that prevent them from buying a home.
‘It would be very unfair to try and burden the younger generation with more taxes to make more concessions,’ he said. ‘There was a concession of over £1 billion made at the time of the last decision in 2011 to help those of the particular age group contacting us now.’
When challenges on women who were not made aware of the state pension age increases, Fysh said he ‘had sympathy’ but ‘we do also need to be responsible and it is hard to say who was contacted and who want not, but from what I have seen, most people were given that notice and that allows them to plan’.
Shailesh Vara, Conservative MP and DWP under secretary, said women who had to wait longer for their state pension would ‘be eligible for the same in or out-of-work benefits as men’.
Neither the Conservatives or the Opposition have come forward with a concrete plan for what transitional arrangements would look like, although SNP MP Ian Blackford said bringing back a means-tested element to the state pension would help those who are most financially vulnerable.
MPs voted 158 in favour of offering help to the affected women, with no votes against. However, as this was a backbench motion the government is not legally obliged to do anything.
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by Gavin Lumsden on Jul 25, 2016 at 00:01