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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 vote to help women hit by state pension age rises

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.

Communication issue

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.

'Broken contract'

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.

22 comments so far. Why not have your say?

Michael Greenland

Jan 07, 2016 at 17:16

Sob sob sob, the changes were clearly communicated. Women just don't listen.

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John Lacy

Jan 07, 2016 at 17:32

So we're expected to pay these women because they don't take enough notice of the world around them---I think that as these proposals have been in place since 1995 it's a condemnation of those affected's lack of planning and research rather than any fault of the government.

I think the phrase "get a job" springs to mind

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winchman

Jan 07, 2016 at 17:36

Michael, you miss the point completely. Presumably you don't have relatives who are affected and, anyway, your comment is just plain rude.

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Michael Greenland

Jan 07, 2016 at 17:45

Winchman, You may think it rude, but the truth hurts. I have a wife in this age bracket and we clearly knew of the changes in 1995 and again in 2011. Too many people just take no notice of events and stick their head in the sand. They are probably the same ones who opted for the lower maried womens NI contributions in the 60's and 70's. Short termism comes back to bite and they should NOT be bailed out by taxpayers.

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Chris Powell

Jan 07, 2016 at 17:45

There is no reason why these women cannot get a job. If you take the state for granted then you have only yourself to blame. Over the last 50 years there have been many disadvantaged people due to the state, that's life get on with it.

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dyche

Jan 07, 2016 at 18:23

I doubt whether any contributor to this board does/will rely on just a state pension in their old age. For those not so fortunate, we should show more compassion and less arrogance.

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mark antrobus

Jan 07, 2016 at 18:42

The real injustice here is despite this law being passed in 1995 we still do not have gender equality in this matter. The state pension is a welfare benefit, and is funded out of the National Insurance contributions of today's working population. Why should I as a man have to pay such contributions to pay this benefit for women who, on the balance of probability, will live longer than me and for a benefit I will have to wait to 66 or 67 to claim? And why should my children or anyone else's who are burdened with graduate debt, truly excessive housing costs, ever rising taxes, reduced in work benefits and abolished work pension schemes have to pay? There is a simple solution for these women - work like everyone else, and if you are unable to claim disability benefits like everyone else. But please stop asking for special treatment at someone else's expense just because of you gender.

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Gill Pelosi

Jan 07, 2016 at 21:13

We'll only have real gender equality when men take time off work to look after young children and also take time off later in life to look after ageing or sick relatives. Both of these commitments still fall disproportionately on women giving them less opportunity to save for retirement.

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dab

Jan 07, 2016 at 22:13

This is about breaking a contract. If the state pension were a company pension scheme the law would prevent erosion of benefits already accrued. This would mean that entitlement to a proportion of their pension at 60 would be preserved, It would only be the portion accrued after the announcement(s) that would be paid at later ages.

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mark antrobus

Jan 07, 2016 at 22:46

But the state pension is not a contract., and it is not a company pension scheme. It is a state benefit, that is paid out of current National Insurance contributions of those who are in work; it is simply incorrect to assume that the contributions that one pays are somehow being invested to pay for one's own later state pension.

And if the argument is that women are disadvantaged because they took time off work, then surely they will be helped by working longer as they can accrue more qualifying years? In is not time spent bring up young children counted via credits arising from claiming Child Benefit? https://www.moneyadviceservice.org.uk/en/articles/protecting-your-state-pension-when-you-have-a-baby

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Jim Waddington

Jan 07, 2016 at 22:51

DABs point is a fair one. The women affected paid into the SP scheme on the basis of a retirement at 60 and only some of those women, late in the day were informed about 'equalisation' and it is not true to say the government have put in place transitional arrangements - only those born up to April 1953 have a minimal transitional arrangement - those born after, say in 1955 get nothing - just 6 years of a pension they have contribute to taken away - £42,000 + is a lot to lose. 'Getting a job' is not really the point. Around 500,000 such women have been short changed as a consequence.

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J Thomas

Jan 07, 2016 at 23:24

I have very limited sympathy with this generation of women. Many of them took advantage of divorce laws to take their husbands to the cleaners (not all, there were some honest ones) and then expected to retire at age 60 a full five years before men. And as women live on average a full three years longer, that is on average eight years longer in which they were (are) claiming pensions off the state.

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dd

Jan 08, 2016 at 00:21

Getting back into work after caring for family is not so easy, Mark A. Ageism exists, especially for the older mother. It is justified by the requirement for "quality" in the eyes of an inexperienced recruiter or one who simply chooses not to see, such quality only being achievable by recruiting those with a degree (any degree, needlework will do) and necessarily from a younger age group. Many women affected by the 6 year extension did not go to university but continued their learning on the job, after work if they could get out by 6pm, and via employer courses. This did not mean that they were incompetent.

Lack of continuity in work due to breaks for caring has resulted for some, in a huge reduction in salary and pension contributions. Some lag is absolutely reasonable due to the absence, but the size of the differential is not so reasonable.

I regard myself as lucky to be able to control my own retirement date, likely to be at around age 70 due to other factors, such as being penalised for:

i) having contracting out of SERPs (state pension reduced);

ii) being contracted out into Equitable Life (private pension reduced);

iii) having remained contracted out while temping and unemployed (!) (state pension reduced further);

iv)having lost a DB pension at the time of a company takeover,

v)having a husband who was made redundant while I was a "mere" carer.

vi)having chosen to care for my children at home, it being such an important time.

vii)having a particular date of birth and the corresponding 6 year extension as compared with those women who went before me.

(I did know, by the way. It was not a surprise for me.)

Luckily I enjoy my work in a small business which contributes positively to the trade balance, via exports. (Well, somebody has to do it. Look at the stats.) I am not even taking work away from a young person. I created my job and my company. I am happy to continue working for many years yet .... but don't (anyone) tell me I have had it easy!

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n3f0

Jan 08, 2016 at 01:02

It really is a load of bull to dismiss this as 'just a benefit'. When the affected women started working they were told they would contribute through their NI stamp and be able to draw a pension at the age of 60. The pension is based on contributions made and many women paid extra in the form of Superannuation; this was paid on the understanding that the benefit would be payable at age 60! Had those women been told in the 1970s they would be denied benefit for a further 6 years, they could have paid the extra into a private AVC pension plan to draw the pension at the agreed age of 60.

It is folly to say the women should have made alternative arrangements after the government decided, unilaterally, to dishonour the agreement as many were no longer in a position to do that. Time out for child care or ill health in later life seriously curtails the earning power of many women, also, supporting children through university eats into disposable income quite considerably, so making extra arrangements later in life is often not possible.

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snoekie

Jan 08, 2016 at 02:37

J Thomas, well said.

The female has been trading on their principal asset for many thousands of years and more so in recent years, particularly when they insisted on equality, but screamed blue blooded murder when it was applied to them.

In divorce, they want equality, but are never prepared to allow their principal asset to be taken into account, which they trade on quite happily thereafter.

It is a fact that women would rather spend when they should be saving, relying on their principal asset to get them out of trouble. And then they don't want to use it to maintain what they had. Time that the court took account of their earning capacity rather than just their sex.

And earning power is taken into account in divorce, but not the principal asset of the woman even when she is demanding compensation for far more than she was ever going to be worth.

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horshamtim

Jan 08, 2016 at 09:36

Mark Antrobus' comments are correct. While there is no good case for continuing earlier pensions for women, it is also undeniable that the communication of the changes has not been well handled by the Government (no surprise there!).

However, there are genuine questions about how far the state should be held responsible for people's ignorance about managing their own finances. The very people who will moan about an interfering "nanny" state are often the first to complain that they should have been protected against their own stupidity.

Part of the problem in this case is the continued widespread refusal to accept that state retirement pensions are a benefit - indeed the largest single chunk by far of the Government's welfare budget. Entitlement is no more and no less than the current Regulations say they are - and as we have seen these can be easily changed. Current pensions are paid for by the contributions by those in work who therefore pay a higher % tax rate than pensioners. For many pensioners their NI contributions during their working lives would come nowhere near paying for their basic state pension - even at the current NI rates, let alone the much lower ones which used to be in place.

The main issue for the future is that many simply do not or cannot save enough during their working lives to afford a comfortable retirement. With a growing elderly population living longer, it could prove difficult to continue financing state pensions using the current model even at their present level - which is hardly a generous one.

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Michael Stevens

Jan 08, 2016 at 09:38

Women campaign for equal rights. Now they are obtaining these on pensions, now they do not like it.

The changes have been in the press for years.

It will not make any difference for their retirement planning, most wait until they arrive at the age

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Chris Powell

Jan 08, 2016 at 09:57

I wonder where these women have been for the last 20 years. It was announced on the news each time, in the press in fact you would have needed to have had a serious illness not to have realised this was going to happen. This is a cop out and there are far more deserving causes such as people who suffer from dementia and don't get enough support. There is only so much money in the pot and we should not expect our children and their children to pick up the bill.

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Jon

Jan 09, 2016 at 09:40

If these women are to be compensated, then I want compensation for Brown's double taxation of pension funds. He gave no notice, and increased the tax on existing funds, not just new contributions. As I had built up a sizeable fund at the time, the amount of extra tax I have paid over the last 20 years is many thousands of pounds !!

Let us live in the real world. Governments can change the rules and do not have to give notice, even if these result in double taxation. Otherwise Budget changes would be impossible. Fairness cuts both ways, and if increased tax or cuts in benefits reduce the weight on the shoulders of future generations, is that not also fair?

To give into these women would set a precedent for any group which felt hard done by.

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Ford Prefect

Jan 09, 2016 at 10:21

I have to agree with horshamtim, Michael Stevens, Chris Powell and Jon.

It's all about personal responsibility and this just shows what happens if you are irresponsible. You only have yourselves to blame so why must it always be someone else's fault?

Of course, there will be some people facing genuine hardship and they may be eligible for other benefits but that is another story.

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Anonymous 1 needed this 'off the record'

Jan 09, 2016 at 17:20

May I add that if women were members of an occupational scheme then they were very likely to have received general pensions information on topics like this at least annually as part of the annual report to members. Some schemes may not have bothered, but most large schemes communicate this way.

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Hampshire cynic.

Jan 11, 2016 at 10:04

I completely agree with Jon and Anonymous 1. A Labour Government did lots of things in the 1990s which disadvantage both sexes, but we simply cannot all expect to be compensated now. Remember, "there is no money left"!

If women did not think about their futures when the revised retirement dates were clearly published in 1995, by Gordon Brown, then they really only have themselves to blame. End of debate!

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