Monday 17 December 2018
Work and Pensions
Women affected by changes to the state pension age
The petition of residents of Newport East,
Declares that the 1995 Pensions Act has been implemented unfairly, with little/no personal notice (1995/2011 Pension Acts), faster than promised (2011 Pension Act), and no time to alternative plans; further that retirement plans have been shattered with devastating consequences; and further that hundreds of thousands of women have had significant changes imposed on them with a lack of appropriate notification.
The petitioners therefore request that the House of Commons urge the Government to work with the All Party Parliamentary Group on State Pension Inequality for Women to make fair transitional arrangements for all women affected who have unfairly borne the burden of the increase to the State Pension Age (SPA).
And the petitioners remain, etc.—[Presented by Jessica Morden, Official Report, 1 November 2018; Vol. 648, c. 1202.]
Observations from the Secretary of State for Work and Pensions (Amber Rudd):
Declares that the 1995 Pensions Act has been implemented unfairly, with little/no personal notice (1995/2011 Pensions Acts), faster than promised (2011 Pensions Act), and no time to (make) alternative plans; further that retirement plans have been shattered with devastating consequences; and further that hundreds of thousands of women have had significant changes imposed on them with a lack of appropriate notification.
The petitioners therefore request that the House of Commons urge the Government to work with the All Party Parliamentary Group on State Pension Inequality for women to make fair transitional arrangements for all women affected who have unfairly borne the burden of the increase to the State Pension Age (SPa).
In 1995, after two years of debate in Parliament and following public consultation, the Government brought in a law to equalise men and women’s State Pension age (SPa). This increased the earliest age when a woman could claim State Pension (SP) from 60 to 65. The Government planned for the original change to take place over 10 years between 2010 and 2020.
However, life expectancy continued to rise. The Government recognised they needed to make further changes to keep the SP affordable. In 2007 they introduced a law to increase SPa for everyone to 66 by 2026, to 67 by 2036 and to 68 by 2046. In 2011 they introduced another law to equalise men and women’s SPa more quickly. The 2011 law also brought forward the increase in everyone’s SPa from 65 to 66 by five and a half years.
The 2011 Government’s original plan was to bring forward the increase in men and women’s SPa from 65 to 66 by six years, so that SPa would reach 66 in April 2020 rather than April 2026. This meant that some women affected would experience a delay in receiving their State Pension of up to two years, compared to the original 1995 timetable. The Government listened to concerns, and as a result, introduced transitional arrangements, worth £1.1 billion. The revised timetable phases in the transition from 65 to 66 more slowly, so that SPa reaches 66 in October 2020, rather than April 2020. This concession reduced the proposed delay experienced in reaching State Pension age for over 450,000 men and women, and means that no woman will see her pension age change by more than 18 months, relative to the original 1995 Act timetable.
We have considered the alternative options and found there are substantial practical, financial and legal problems to all alternative options that have been suggested to mitigate the impact on those affected.
Reversing the 2011 SPa changes would cost over £30 billion up to the end of 2025/26, whilst returning to a female SPa of 60 would cost over £77 billion by 2020/21. Going back on these changes could also create a new inequality between men and women.
Any amendment to the current legislation which creates a new inequality between men and women would unquestionably be highly dubious as a matter of law.
Further changes to SPa are not justified, particularly given the need to use public money to help those most in need.
Our ‘Fuller Working Lives Strategy: A Partnership Approach’, published in February 2017, aims to help older workers remain in or return to employment, and to change employer’s attitudes. It also sets out the action Government are taking to support older workers to remain in the labour market. There are more people in employment aged 50 years and over than ever before with 10.3 million workers aged 50+; an increase of 1.4 million over the last five years. There are now 4.3 million women aged 50-64 in employment which is an increase of 700,000 over the last five years.
The Government have changed the law to create the right support for our Fuller Working Lives strategy. For example it is now against the law to dismiss someone from their employment just because they reach the age of 65. Employees also have the right to request flexible working as long as they have worked continuously for the company for six months. This means people can agree a work pattern to suit their circumstances.
The Government also support vulnerable people. They spend around £50 billion a year on benefits to support disabled people and people with health conditions, and also provide support to eligible carers through the payment of Carers Allowance.
Since 1995 the Government have gone to significant lengths to communicate SPa changes. Letters were sent to women born between 6 April 1950 and 5 April 1953 from April 2009 to March 2011 informing them of State Pension changes. Those affected by the 2011 SPa changes were written to between January 2012 and November 2013.
Over the last 18 years the Department for Work and Pensions (DWP) has provided over 25 million personalised State Pension estimates. It has encouraged people to request these as part of their long-term financial planning—after all, retirement is a life changing financial decision and people are expected to plan for this.
Following the 1995 SPa changes, the equalisation of men and women’s SPa was often reported in the media and debated at length in Parliament. The Department for Work and Pensions (DWP) produced communications materials relating to increases in State Pension age (SPa) for both men and women, and carried out a pension’s education campaign between 2001 and 2004. This included information on the future equalisation of SPa. Later DWP sent individual letters to those affected. The Government made further increases to SPa in 2011 after a public consultation exercise and extensive debates in Parliament.
With the Government facing increasing financial pressures, it is simply not justified to reverse these changes, especially when we take into account that women who reached State Pension age in 2016 are estimated to receive more State Pension on average over their lifetime than women ever have before.
We will be making no further changes to the law on this issue. Doing so would mean working-age people, especially younger people, bearing a greater financial burden to support the rising costs of the pensions system.