State Pension: Impact of Changes on Women

Part of Opposition Business – in the Northern Ireland Assembly at 5:00 pm on 26th September 2016.

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Photo of Andy Allen Andy Allen UUP 5:00 pm, 26th September 2016

I beg to move

That this Assembly acknowledges the Women Against State Pension Inequality (WASPI) campaign; recognises its call for fair transitional state pension arrangements for women born in the 1950s who have been negatively impacted by changes made to the state pension age under the Pensions (Northern Ireland) Order 1995 and the Pensions Act 2011; accepts that the changes were poorly communicated; appreciates the impact of the changes on post-retirement planning; and calls on the United Kingdom Government to re-examine their position and bring forward fair transitional arrangements for the women affected.

I bring the motion before the House to recognise the unfair treatment that has been forced on women born in the 1950s, who have been negatively impacted by increases to state pension age.

Allow me to first outline the issues that have left the affected women feeling rightly aggrieved. In 1993, in his Budget statement, the then Chancellor of the Exchequer, Ken Clarke, outlined that the state pension age for women would be equalised between 2010 and 2020.

At the time, this was justified on the grounds of financial sustainability and equality in order to bring the UK in line with the equal treatment rules in European law. The Pensions Act 1995 set a timetable for women's pension age to accelerate to reach 65 by April 2020. It would begin to increase in April 2010.

Let me make this clear: no one is arguing against equal state pension ages for men and women, especially not the women behind the Women Against State Pension Inequality (WASPI) campaign, whom I had the pleasure of listening to this morning. What has caused grievance is the lack of any attempt by the Government to make those affected aware of the changes. Given that the changes would not begin to take place until 15 years after the legislation was introduced and that, when the proposals were announced, the relevant women would have been no older than 44, the responsibility lay with the Government to ensure that all those who would be disadvantaged by the changes were well informed of the implications. Sadly, this did not happen. To add further anguish, following the 2010 general election, the coalition Government announced that they would increase the overall state pension age to 66 in light of increases in life expectancy. Women's pension age would now reach 66 by October 2020. For this to happen, the Government would accelerate the increase in women's state pension age from April 2016, when it would be 63, to reach 65 by November 2018 rather than April 2020 as previously planned under the 1995 Act. In their 2010 manifesto, the Conservative Government said that the pension age for women would not increase beyond 65 until at least 2020. Therefore, the Pensions Act 2011 amounted to a broken promise.

It was only shortly before their sixtieth birthday that many women learned that, in fact, they would not be able to draw their pension at 60, with some having to wait until they were 66 to receive it. The changes in the 2011 Act mostly acutely affected women born between October 1953 and April 1955, who will have their state pension age increased by at least a year on top of the increase that resulted from the 1995 Act. These women worked hard all their lives and contributed to the National Insurance pot with the belief that, when they turned 60, they would be able to draw the state pension, yet these changes have unfairly and disproportionately impacted women born on or after 6 April 1951. They have been uniquely disadvantaged. A large percentage of these women received a letter advising them of significant increases to their state pension age only within two years of the expected state pension age of 60. It is not unreasonable to expect Government to take appropriate steps to communicate the biggest changes to women's pensions in half a century. However, the changes were not communicated in a way befitting the scale of the changes, leaving many women unaware and still planning to retire at 60. Many women reported never receiving a letter. Others say that letters were sent to the wrong address, despite their notifying DWP of the address change. WASPI is still receiving reports of women who are just finding out about the changes.

It is important to note that the Turner commission, the Work and Pensions Select Committee and Saga have all recommended that, for changes to the state pension, those affected must receive 10 years' notice at the very least. The Government now agree with this position, despite not following it in the past.

It is important to focus on the human side of these changes. I am sure that we could all think of friends or family members who have been impacted. Women who expected to be able to spend their early 60s in retirement or semi-retirement and believed that they would be able to spend more time with their children and grandchildren now have their lifetime ambition postponed. Financially, these changes have driven a horse and carriage through retirement plans, with the lack of communication leaving little time to make alternative arrangements. That has had devastating consequences.

We know that there are substantial barriers to older people gaining new employment. Some have been forced to seek casual, low-paid work as a result of these changes. Some women are relying on increasingly dwindling life savings, and others will have to depend on their spouses for financial support, which means loss of independence for women who are single, divorced or widowed. It could mean the delay of their only source of income. As a member of the WASPI campaign put it:

"Significant changes to the age we receive our state pension have been imposed upon us with a lack of appropriate notification, with little or no notice and much faster than ... were [proposed] – some of us have been hit by more than one [change]. As a result, hundreds of thousands of us are suffering financial hardship, with not enough time to re-plan for our retirement. Women are telling us that they can’t believe their retirement age has increased by 4, 5 or 6 years and they didn’t even know about it!!"

The WASPI campaign is not seeking to challenge state pension equality, nor does it seek to reverse the 1995 or 2011 Pensions Acts. What it seeks is fairness. It is a matter of fairness that transitional payments be given to those women.

The key point is the lack of notice. The Work and Pensions Select Committee at Westminster has established that more should have been done to communicate the planned changes. In 2011, the Pensions Minister, Steve Webb, was on record as saying that the Government were forced to implement the changes without appropriate notice because of the state of public finances at the time. We are now in a different fiscal context, and, because of the lack of appropriate notice, and the effect that the changes have had on women born on or after 1951, the Government should introduce transitional payments to assist those women who have been adversely affected. The Government have made £30 billion of savings from these changes, so it is only just that some of those moneys be released to assist those women who have been disadvantaged.

In written responses to questions asked by my Westminster colleagues, the Department for Work and Pensions has continuously stated that it has no plans to introduce transitional arrangements. I call on the Department to rethink that position and to consider ways in which the grievances of the women affected can be addressed. I encourage Members to support the motion.