The UK Government has today rejected calls to aid women affected by an accelerated increase to the state pension age, meaning some women are set to miss out on on estimated £45,000 in pension payments.
The announcement follows an Opposition Day Debate on the state pension age, where opponents of the changes called for compensation to be paid to those affected.
MPs argued that women were not given sufficient warning and highlighted comments made by the renowned expert on life expectancy, Professor Sir Michael Marmot, who warned that improvements in life expectancy over the last century are “pretty close to having ground to a halt”.
In a statement to Parliament, the Under-Secretary of State for Work and Pensions, Guy Opperman MP, said: “The decision to equalise the state pension age for men and women dates back to 1995 and addresses a long-standing inequality between men and women’s state pension age.
“This change was part of a wider social trend towards gender equality, but was also a decision, partly as a result of European and equality legal cases, relating to occupational pension provision.
“During the Blair and Brown years, the then Government decided that a state pension age fixed at 65 was no longer affordable or sustainable. The Pensions Act 2007 introduced an increase in state pension age to ages 66, 67 and 68.
“The coalition Government brought in further changes under the Pensions Act 2011, which accelerated the equalisation of women’s state pension age and brought forward the increase in men and women’s state pension age to 66 by 2020.
“During the passage of this Act, Parliament considered a range of alternative options, resulting in a £1.1 billion concession that capped the maximum increase any woman would see in her state pension age at 18 months, relative to the Pensions Act 1995 timetable.
Mr Opperman said the Government has gone to “significant lengths to communicate these changes.
“People were notified with leaflets, an advertising campaign was carried out and later individual letters were posted out”, he said.
“Those affected by the 1995 Act changes were sent letters informing them of the change to their state pension age between 2009 and 2011, with letters sent to 1.2 million women. Those affected by the Pensions Act 2011 changes were sent letters between January 2012 and November 2013, which involved sending over 5 million letters with an accompanying leaflet.”
He continued: “Life expectancy and state spending are what have driven these changes. Society has changed in countless ways since the 1950s and life expectancy is no exception. A girl born in 1951 was expected to live to 81, and a boy to 77.
“By 2018, the latest Office for National Statistics cohort figures show an increase of over 10 years for newly born girls and over 12 years for boys, to 92 and 89 respectively. Life expectancy at older ages has also gone up during this period and is projected to continue to increase in future years.
“These welcome increases in life expectancy of course have implications for the state pension. As people live longer, they invariably also spend longer in retirement. Had we not equalised the state pension, women would be expected to spend over 40% of their adult lives in retirement, a proportion which would only continue to increase.
“This situation is not sustainable for any Government and means increasing taxes for the working population. Going as far as some campaigners have urged and revoking the 1995 Act would represent a loss of over £70 billion to the public purse.
“The state pension must be maintained on an affordable footing for future generations of pensioners and taxpayers. That necessitated the Government’s action to equalise and then increase the state pension age through the Pensions Acts of 1995, 2007, 2011 and 2014.
“Any further transitional arrangement would come at great cost. The Government have considered many options and all of the proposals would be wrought with substantial legal problems, as well as financial ones.
“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. Causing younger people to bear a greater share of the cost of the pensions system in this way would be unfair and undermine the principle of inter-generational fairness that is integral to our state pension reforms.”
He concluded: “The key choice a Government face when seeking to control state pension spend is to increase state pension age or pay lower pensions, with an inevitable impact on pensioner poverty. The only alternative is to ask the working generation to pay an even larger share of its income to support pensioners.
“I believe that successive Governments have made appropriate but difficult decisions to equalise and increase the state pension age. A significant concession was made in 2011 so that no woman will see an increase to her state pension age of more than 18 months, relative to the 1995 Act timetable.
“To renege on our decisions and further increase costs to the public, especially the working population, would be unfair and unaffordable.”
Responding to the statement, Labour’s Shadow Minister for Work and Pension Jack Dromey MP said: “This statement does nothing to address the pensions injustice these women face. The Government have had multiple opportunities to act, so why is the Minister again refusing to use the opportunity of a motion passed by this House to do so to take further steps?
“It is unacceptable that we are having to make this same argument and raise the same points again because this Government continue to refuse to help these women, who are suffering and losing out due to the acceleration of the state pension age and lack of proper notice.
“This issue is not going to go away. Why do the Government continue to act as though it will?
“This statement is, sadly but not unsurprisingly, yet another example of the Government’s failure to give women born in the 1950s the dignity and respect they deserve. It is a missed opportunity to take real action.
“We have all heard often heart-breaking stories from many thousands of women affected by the changes about how the situation they face is one of desperation and fear of poverty.
“Christine in my constituency is 62 and is now having to wait until she is 66 to retire, with both her husband and her father having just died. In her words, “Not that cleaning jobs are a bad thing, but I have never done a cleaning job in my life and I am now having to do three cleaning jobs to make ends meet until such time as I can retire.” That is wrong.”
Mr Dromey added: “The pension age is due to rise to 66 by the end of 2020. We reject the Government’s proposal to increase the state pension age even further.
“We will act by putting in place a new review of the pension age, specifically tasked with developing a flexible retirement policy that reflects the contributions people make, the wide variations in life expectancy and the arduous conditions of some work.
“It is also right to extend pension credit to those who were due to retire before the increase in the pension age, which would benefit hundreds of thousands of women. Will the Minister look again at that proposal?
“In conclusion, sadly, this statement does nothing to help women born in the 1950s.
“Actions are needed, not words, if the Government are to restore some of the faith and dignity that many people feel they have lost as a result of the Government’s refusal to act and to introduce proper transitional procedures.
“These are the women of Britain—the women who built this country. They deserve nothing less.”