Women's hopes dashed again - Ros Altmann

    Ros is a leading authority on later life issues, including pensions,
    social care and retirement policy. Numerous major awards have recognised
    her work to demystify finance and make pensions work better for people.
    She was the UK Pensions Minister from 2015 – 16 and is a member
    of the House of Lords where she sits as Baroness Altmann of Tottenham.

  • Ros Altmann

    Ros Altmann

    Women's hopes dashed again

    Women's hopes dashed again

    Hopes dashed again for half a million women in their late fifties

    Government misses another opportunity to revise unfair state pension age plans

    by Dr. Ros Altmann

    (All material on this page is subject to copyright and must not be reproduced without the author’s permission.)

    Half a million women were again let down by the Government this week, when MPs failed to amend the unfair timetable for planned state pension age increases. As the Pensions Bill was debated in the Committee Rooms of the House of Commons, there was no sign of the promised ‘transition arrangements’ which were supposed to mitigate the unfairness caused by the Bill’s proposed pension age changes.

    Many of those affected don’t even know and there are only a few years to go: Women in their late fifties, who have been singled out to bear the brunt of the Government’s plans to save money on state pensions, have been offered no relief. Worryingly, it became clear in the Committee Debate that many of those who will be affected do not even yet know what will happen and there are only five or six years left before the changes start.

    These women are being hit a second time: It is simply wrong to treat these women in this manner. They have already accepted, without fuss, a huge rise in pension age, under the 1995 timetable. The Coalition Agreement promised that their pension age would not rise again but that promise has been broken and they face a second large rise in pension age, without sufficient notice to prepare for the change. 500,000 face more than a further one year delay and over 300,000 another delay of more than a year and a half.

    Women have begged their MPs for help: Having sat through Tuesday’s Committee Debate, it was clear that MPs are not comfortable with these plans and have had many letters from women affected. Many of these women have written to me, thousands have already signed the Saga Petition, and they were hoping to hear how the Government planned to change its timetable, to make it fairer. But there was not a word on this from Ministers.

    It is right to equalise and raise state pension age, but not like this! Everyone agrees that men and women’s pension ages should be equalised, and that state pension age needs to rise. The problem with the Pensions Bill proposals, however, is one of timing and the disproportionate unfairness of forcing just one group of women to bear the brunt of the change.

    Many of these women have already retired to care for others, or are ill themselves, so they can’t ‘keep working: The Government says that these women will need to ‘work longer’ or ‘wait longer’ for their state pension and can rely on unemployment benefits in the meantime! What an insult. Many of the women affected have written to me to explain that they are not working even now (Government figures show that about a third of these women are already out o the labour force) either because they have taken early retirement to care for relatives, or because they themselves are not well.

    Government tells us to plan for pensions over the long-term, they did this and then had the goalposts moved a second time without time to make long-term preparations! Many of them made careful financial plans to ensure their small savings could last them until state pension age, and now find that they will be left for up to two years with nothing to live on – despite doing what the Government urges everyone to do and plan ahead for their future. How can we expect people to make long-term plans for their pensions if the goalposts are moved by the Government at such short notice?

    We need Ministers to bring forward fairer plans: Government must urgently announce what it will do to mitigate the impact of its desire to save money on state pensions. At the moment, it plans to hit just one group of women (who have already quietly accepted that their pension age would rise by three, four or five years – and planned for that) and make them shoulder far more of the burden of pension costs savings than anyone else.

    Where are the ‘transitional arrangements’? During the Pensions Bill Second Reading, the Secretary of State acknowledged the unfairness to this one group of half a million women and promised he would adjust the current plans. Yet, there is no sign of what he proposes to do to mitigate their plight. We need the Government to explain how it proposes to make ‘transitional arrangements’ as soon as possible, to give these women some relief. Of course there will be a chance for more changes in the Report Stage of the Pensions Bill in the autumn, but why make these women wait and worry even longer?

    There are better ways of achieving these legitimate aims: The Government argues that increasing state pension age would cost £30billion in the period 2015-2025, so we must proceed. But there are other ways of achieving its aims – and even raising more money.

    Increasing to 66½ by 2025 would save even more than £30billion over the same period and better achieve its objectives of increasing pension age to cut pension costs: By keeping the current timetable that will equalise men and women’s pension age at 65 in 2020 and then accelerating the rise to 66 in 2021, moving on to 66½ by around 2025, the Government can save even more than £30billion in the period 2015-2025. This would be far fairer than the current proposals, would give people time to prepare properly and would save more money! I hope that the Government will work this out for itself and recognise the need to change course slightly, in order to achieve a better pension outcome for the longer term.

    The current plans must change, the sooner the better.

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