Last week, an article appeared on this site outlining 10 possible solutions to the problem of 1950s women’s state pension changes.
The author, IFA Mary Waring, managing director of Wealth for Women, agreed with the official Waspi campaign’s view that women’s and men’s state pension age (SPA) should be equalised, and she went on to say that 'equality should ensure that no individual or group is treated less favourably than any other'.
The article can be read here.
She also highlighted that she shared Waspi’s concern not with the increase in the SPA itself, but the manner in which it has been done, with insufficient notice and communication to allow those affected to adequately plan for the change in their retirement circumstances.
So far, so good.
But then, after briefly reviewing the 10 options, Waring concluded that the one which would give Waspi the best chance of success is that of an actuarially reduced pension for life, which would be cost neutral for the government.
Of course, she is absolutely right in that this option is likely to be attractive to the government, because it will cost it nothing. However, it is not an option which Waspi can endorse as it stands, for a number of reasons.
Not an option
Since it is cost neutral to the government, as well as the actuarial reduction related to early drawing, the women taking the early pension will also have to pay the costs of the administration of the scheme themselves. This is rather like the government admitting it has got things wrong, but saying that the women affected by the government's mistake will have to be the ones paying to put it right.
While it is often said that this option could bring some short term relief to those in the greatest hardship, at present nothing is known about the impact that taking an early reduced pension might have on other benefits.
Broadcaster Paul Lewis commented in March this year: 'Women who were already on a means-tested benefit such as jobseeker's allowance, universal credit, employment and support allowance, housing benefit, council tax support would find that benefit was reduced if they got the state pension. So the very women who need the support could find they get the least from it.'
So, far from helping those in hardship there is, in reality, no assurance that those 1950s women most in financial need would actually benefit from such a scheme.
Other solutions mentioned are not acceptable to Waspi because they only help a sub-set of the women affected, or are simply not an adequate response to the financial distress that has been caused. In essence, offering a free bus pass does not make up for the loss of up to £45,000 of retirement income.
The official Waspi campaign has always asked for fair transitional state pension arrangements for all women born in the 1950s (on or after 6th April 1951). The only solution from the 10 featured that meets this requirement is a bridging pension to cover the gap from age 60 until the new SPA.
This does not equate to receiving the equivalent of the full pension from age 60. Rather it equals a percentage of the pension being paid from 60 until SPA, with the full pension being paid only from that date onwards. Cost neutral? No, but as one of the leading members of the Waspi All Party Parliamentary Group, Tim Loughton MP, has said in a recent video blog, there is substantial funding available in the national insurance fund, ring fenced for pensions spending.
With two former pensions ministers, Steve Webb and Ros Altmann now publicly pledging their support, with over 47,500 people following the official Waspi Facebook page (the next largest campaign group has only just over 3,000 followers), and with its £75,000 CrowdJustice stretch target now smashed at nearly £90,000, Waspi is a force to be reckoned with.
Alongside its legal campaign, Waspi continues to engage with politicians from all parties. Its leaders recently met with MPs from the SNP and discussed with Labour leader Jeremy Corbyn and shadow ministers how Labour might support the Waspi cause. Its many local groups are making themselves heard in Tory marginal seats up and down the country and there is a growing awareness that 2.6 million 1950s women’s votes could make a big difference at the next election.
Time for the government to get thinking on how best to make those fair transitional pension arrangements.
Jane Cowley, member of the interim management team of the official Waspi campaign.