Half a million women let down by Government again
House of Lords vote on Women’s State Pension Age changes narrowly lost
Government must think again!
by Dr. Ros Altmann
(All material on this page is subject to copyright and must not be reproduced without the author’s permission.)
After a passionate debate in the Lords, the Government narrowly scraped through its proposals to increase women’s state pension age by up two extra years starting in 2016.
This is a cruel blow for women in their mid to late fifties who have been treated with disdain by the Government. In its Coalition Agreement, the Government promised that the pension age for women would not start increasing before 2020, but it now plans to increase their pension age from 2016. Half a million women face a pension age rise of over one year and over 300,000 will be delayed by over 18 months.
The Government must think again. An amendment to the proposals, which would have seen any increase in women’s state pension age limited to a maximum of one extra year beyond the already accepted increases of 3, 4 or 5 years, was defeated by 226 votes to 214. There was clearly strong feeling that the Government is not acting correctly on this.
Saga has been inundated with letters and emails from women desperate and furious about being betrayed in this way. Many explain that they have already retired to care for relatives, or that they are very ill and cannot keep working.
These particular women had no chance to build up private pensions when they started working. Men of this age could join company schemes, but women working part-time were banned from company pensions. Yet the Government is making them bear the brunt of cost-saving measures designed to save money on pensions in the long-term.
If life expectancy is increasing, then it is right that pension ages should rise, but it has to be done fairly, with sufficient notice for people to plan.
|Number of women facing increased state pension age of over one year
Number of women facing increased state pension age of over 1½ years
Number of men facing increased state pension age of over one year
|Number of years of pension age increase for women between 2010-2020
Number of years of pension age increase for men between 2010 -2020
|Number of years’ notice of 2-year rise in pension age for women
Number of years’ notice of 1-year rise in pension age for men
|Proportion of these women who are single (no husband to rely on)
Proportion of these women with no private pension
For those with private pension, amount of pension wealth relative to men
For those with final salary pension, amount relative to men
|Cost of delaying pension age increase to 2020 then reaching 66 by Apr 2021
Cost of ensuring no woman faces more than a one year increase in SPA
Cost of keeping pension credit age on current timetable to protect poorest
Why are these changes so unfair?
- Women’s pension age is rising by up to 2 years: no man will see more than a one year rise.
- Women are being given six years’ notice of a two year change, while men are being given seven years’ notice of just a one year increase.
- Women are much more reliant on the state pension as they have had less chance to build up a private pension and have less private pension than men.
- Around 35% of these women will be single when they reach their 60s so have no husband to rely on.
- Many of these women are already retired, or caring for older or younger relatives.
- Many of these women are ill, with shortened life expectancy.
- Targeting same women twice, despite Coalition Agreement promising not to.
Government’s reasons for this change do not stand up to scrutiny:
- It says it cannot increase men’s pension age before women’s due to EU law.
This is not a reason to punish women: it is a reason to delay the increases for everyone until 2020. It is also certainly not any justification for increasing women’s pension age by even more than that of men.
- It says it has to save money due to the deficit problems
There will be no money saved in this Parliament, so the argument about fixing finances and overcoming the deficit does not stand up to scrutiny.
- It says that life expectancy is increasing so it has to raise state pension age
That is true, but does not require this pension age change being imposed at short notice on one group of women who have already accepted and planned for a sharp rise.
- It says it has to put pensions on a sustainable long-term footing and costs are rising
The argument about long-term sustainability is well made, but still does not justify the sudden increase being imposed on one group of women at such short notice, especially when the Government knows that these particular women are more vulnerable than men and have little or no private pension wealth. The pension system can be put on a long-term sustainable path by increasing state pension age more quickly in the future years, rather than having to rush to do it now so unfairly.
- It says that these women can go onto unemployment benefit
For many of them, this is not an option and, in any case, this will not replace two years of lost pension. It also says they can keep working but, if they are already retired or caring for others, that is not an option. This is not a reason to behave so unfairly.