Work and Pensions Secretary say promises made to women were irresponsible
Working women in this country who were born in the 1950s will lose up to £12,000 from changes to the State Pension age and will not get any help from the government despite earlier promises, a government minister said last week
Work and Pensions Secretary Stephen Crabb last week told MPs it was “just not fiscally possible” to fix the problem despite promises by his predecessor Ian Duncan Smith to introduce so-called transitional arrangements. He said MPs who suggested it would be were being irresponsible and giving false hope to the women who will lose out.
The change means many women born in the 1950s will now face various degrees of financial hardship while they wait longer to draw the state pension. The age at which they can draw the pension is rising by up to six years from when they had expected to retire, 65 in November 2018 and 66 by October 2020.
Chancellor George Osborne brought forward the eligible ages in 2011. But Mr. Crabb said there simply is no “doable” solution: “I completely understand women who feel that they were taken a bit by surprise.”
A newly formed lobby group, Women Against State Pension Inequality (Waspi) has asked for “fair transitional arrangements” and said it was surprised that Mr Crabb had seemingly ruled them out without consulting them, especially as the pensions minister, Ros Altman, had promised she was examining ways to deal with the issue.
Last month Pensions Minister Baroness Altmann – who came into government from running SAGA – said she was looking at ways to fix the discrepancy. WASPI co-founder Marion Smulders told the same radio programme after Mr. Crabb’s comments: “I am disappointed, but still hopeful.”
The age at which women qualify for the state pension will rise to 65 in November 2018 and 66 by October 2020, in order to bring it into line with men’s and, says Whitehall, to take account of “everyone living longer”. It was first mooted in 1995, when then PM John Major’s government expressed its intention to gradually increase women’s retirement age to 65 between 2010 and 2020.
Over a decade later in 2007 the Labour government said both men and women would see their retirement age go up to 66 between 2024 and 2026.
“Parliament extensively debated the issue and listened to all arguments both for and against the acceleration of the timetable to remove this inequality”
But in 2011, Chancellor George Osborne brought forward the timing of both changes to 2018 and 2020 respectively, hitting women particularly hard because their increases are happening both sooner than expected and in quick succession.
Some 2.6million women got just five years’ notice of an extension to their pension age, and 416,000 will be living on annual incomes of less than £8,000 while they wait, according to the non-partisan House of Commons library. At least 80,000 women will lose up to £8,000 because of the changes, with 48,000 losing as much as £12,000, according to Labour MP and former shadow work and pensions secretary Rachel Reeves.
The Women Against State Pension Inequality campaign said it agrees with equalising women’s and men’s pension ages but not the unfair way in which it has been done: “Retirement plans have been shattered with devastating consequences.” It wants fair transitional arrangements for all women born on or after 6 April 1951.
Frank Field MP, chairman of the work and pensions committee, said: “Successive governments have bungled the fundamental duty to tell women of these major changes to when they can expect their state pension.”
The Department for Work and Pensions said in a statement: “The Government will not be revisiting the state pension age arrangements for women affected by the 1995 or 2011 Acts.
“The Government carried out extensive analysis of the impacts of bringing forward the rise to 66 when legislating for the change. The decision to amend the timetable originally set out in the bill, to cap the maximum increase at 18 months rather than two years, was informed by this analysis.
“The policy decision to increase women’s State Pension age is designed to remove the inequality between men and women. The cost of prolonging this inequality would be several billions of pounds.
“Parliament extensively debated the issue and listened to all arguments both for and against the acceleration of the timetable to remove this inequality.
“The decision was approved by Parliament in 2011 and there is no new evidence to consider.
“Following the 2011 changes, DWP wrote to all those directly affected to inform them of the change to their state pension age – using the address details recorded by HMRC at the time. It went on to say the new state pension, “will be more generous for many women who have historically done poorly under the current, two-tier system – largely as a result of lower average earnings and part-time working.”