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State Pension Age

Volume 526: debated on Monday 28 March 2011

4. Whether he plans to review the timetable for the raising of the state pension age for women born between December 1953 and October 1954. (49041)

We recognise the importance of giving people notice so that they can prepare, which is why the timetable for the state pension age changes will not begin to affect people who are due to retire until after 2016. However, life expectancy has increased dramatically. We believe that the timetable in the Pensions Bill provides the best balance between the impact on individuals and fairness to the taxpayer, who will fund the cost of that increased longevity.

I think that we all accept what the Minister has said, but it remains the case that a very small group of women who just happen to have been born at a particular time are affected. It cannot be beyond the scope of Government to do something for that group, who at present are being more disadvantaged than anyone else simply because of the time at which they were born.

My hon. Friend has raised an important point, but of course as soon as we do something for that particular cohort, another of people born a month earlier or later will say “That’s not fair”, and before we know it we will have delayed the change until 2020 at a cost of £10 billion. Although my hon. Friend asked his question in a characteristically beguiling way, I must tell him that there is no simple way of dealing with that one group.

The Minister will be aware that it is increasingly difficult for women over the age of 50 to obtain employment. Given the later pension age that the Government are introducing and the changes in employment and support allowance, women who find it impossible to obtain jobs may find themselves with no financial support at all.

The hon. Lady has raised an important point about the financial support available to the group concerned. In fact, about 70% of them are in paid employment, and that section of the labour market is doing better than other sections. We reckon that three in five of these women have built up occupational pension rights on which they will be able to draw before they reach the age of 66, and both ESA and JSA will be available in certain circumstances. A combination of sources of income will be available to them.

In his statement last Wednesday, my right hon. Friend the Chancellor said that he was hoping for

“a new, more automatic mechanism for future increases in the state pension age based on regular, independent reviews of longevity.”—[Official Report, 23 March 2011; Vol. 525, c. 961.]

With longevity increasing by about a year every year, that brought to my mind the vision of a cohort of people who might never actually reach pension age. Will the Pensions Minister comment?

Tempted though I am, we do not propose to abolish retirement. What my right hon. Friend the Chancellor said was that we need to take account in a more automatic way. I do not recognise the improvement of one year per year, although it is rising very rapidly. The key is that we need to do things with proper notice and make sure people have successful longer working lives and therefore build up bigger pensions when they come to draw them.

I could not agree more with the points made by the hon. Member for Torbay (Mr Sanders), because the Government’s proposals mean 500,000 women will have to wait for more than a year longer before they receive their state pension, while 33,000 women will have to wait for exactly two years longer. With 10,000 signatures now on a petition calling for a rethink, and full-page letters in today’s Times and Telegraph asking the Government to think again, will the Minister now accept that the strength of opposition both in this House and outside is too great for the Government not to think again?

I am surprised the shadow pensions Minister chose not to raise the issue of the state pension reform announced by the Chancellor in the Budget statement, which will be of particular benefit to this group of women. Many of the women who are aged about 57 spent considerable amounts of time out of work bringing up children, and we will reform the state pension system so that they get a proper pension for the first time.