Monday 16 November 2020
Work and Pensions
The increase to the state pension age
The petition of residents of the constituency of Glasgow East,
Declares that as a result of the way in which the 1995 Pension Act and the 2011 Pension Act were implemented, women born in the 1950s (on or after 6 April 1951) have unfairly borne the burden of the increase to the State Pension Age; further that hundreds of thousands of women have had significant changes imposed on them with little or no personal notice; further that implementation took place faster than promised; further that this gave no time to make alternative pension plans; further that retirement plans have been shattered with devastating consequences; and further that the coronavirus pandemic and concomitant economic downturn has caused additional hardship to many of the women who were previously affected by these changes to the State Pension Age.
The petitioners therefore request that the House of Commons urge the Government to make fair transitional arrangements for all women born in the 1950s (on or after 6 April 1951) who have unfairly borne the burden of the increase to the State Pension Age.
And the petitioners remain, etc.—[Official Report, 15 September 2020, Vol. 680, c. 281.]
Observations from the Secretary of State for Work and Pensions (Dr Thérèse Coffey):
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 from 60 to 65.
The state pension age timetable increasing state pension age for both men and women to age 66, 67 and 68 was set out in the 2007 Pensions Act, and the timetable for rises to age 66 and 67 was brought forward by the 2011 and 2014 Pension Acts. During the passage of the 2011 Act, Parliament legislated for a concession, worth £1.1 billion in 2011-12 prices, that meant that no woman would see her pension age change by more than 18 months, relative to the original 1995 Act timetable.
Changes to state pension age were fully debated when the 1995, 2007, 2011 and 2014 Pensions Bills were before Parliament. Government also committed in the 2014 Pensions Act to undertake a review of state pension age every six years to consider the appropriateness of the state pension age rules. The first review was published in 2017 and the statutory deadline for the publication of the next review is 2023. Government stated in the 2017 Review of State Pension age that this will evaluate increases in state pension age to date, including the rise to 65 for women and increase to 66 for both men and women.
As the Court of Appeal recently found in the case of Delve and Glynn, successive Conservative, Labour, and Coalition Governments from 1995 onwards gave adequate and reasonable notice about SPa Changes. Women were informed about the changes in their state pension age from 60 to 65. Between 2009 to 2018, letters were sent to women affected by the equalisation to 65 and the rise to 66. Government also ran a number of campaigns to increase awareness of the changes and provide information to support financial planning. A new website was also launched which set out the changes to state pension age and provided guidance and information. Research has shown that 95% of women in 2010-11 were aware of changes to their state pension age (Holman et al. 2020).
Recent state pension reforms, including the introduction of the new state pension, mean that over three million women stand to receive an average of £550 more per year by 2030. Women have also benefited from the expansion of automatic enrolment which was designed specifically to help groups who historically have been less likely to save. Among private sector workers eligible for automatic enrolment, women are now equally as likely to have a workplace pension as men: 86% had a workplace pension in 2019, equal to that of men. This is up from 40% in 2012.
Since April 2010, the full yearly amount of the basic state pension has risen by over £1,900 in cash terms. In April 2020, full amounts of the basic and new state pensions increased by 3.9%, in line with average earnings growth. We have also acted quickly to protect pensioner incomes further in light of there being no average earnings growth in 2020, as a result of the current volatile economic circumstances arising from the COVID 19 pandemic. This would have meant that, without taking action, we would have been unable to increase state pensions in 2021-22. So we have introduced an Uprating Bill to ensure we can increase state pension and pension credit rates for 2021-22. Without this legislation, that would not have been possible.
Pension credit continues to provide an important safety-net for pensioners on low incomes. We also support older people through further measures, including the provision of free bus passes, free prescriptions, Winter Fuel Payments and Cold Weather Payments.
The Government are also actively encouraging everyone to take steps to prepare financially for later life. Since 2000, people have been able to request a personalised state pension statement setting out their current state pension age and forecasting their future entitlement. Between April 2000 and September 2020, DWP has provided more than 37.9 million such statements to people who have requested them. In 2016 the ‘Check your State Pension Forecast’ service was introduced, allowing individuals to check their state pension forecast online. Of the 37.9 million statements issued, 23.4 million have been issued digitally through the Check Your State Pension Forecast service. The Department also set up the Money and Pensions Service (MaPS) in February 2019, an arm’s length body sponsored by DWP. MaPS brings together three respected financial guidance bodies; the Money Advice Service, The Pensions Advisory Service and Pension Wise. In addition to other advice, MaPS also offers a mid-life MOT for self- employed people to review their health, skills and finances in order to better prepare for the future they want. Overall, MaPs delivered over 1.2 million advice sessions in 2019-2020.
We have no intention of reversing changes to state pension age. It would be neither affordable nor fair to future generations to do so. The latest Office for National Statistics ‘cohort’ life expectancy projections show that life expectancy is increasing, all be it at a slower rate. Furthermore, the proportion of people over SPa compared to the number of people of working age is projected to increase. We provide support to help older people stay in and return to work. For those who cannot work, our welfare system continues to provide a strong safety net.
Government are determined to ensure that the state pension system is fair to future generations, is sustainable and that people have certainty about when they can expect to receive their state pension.