State Pension: Impact of Changes on Women

Part of Opposition Business – in the Northern Ireland Assembly at 6:00 pm on 26th September 2016.

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Photo of Paul Givan Paul Givan DUP 6:00 pm, 26th September 2016

If I can make some progress, I will come back and give way to you.

The pensions landscape has changed significantly in recent years, not only with state pension age increases but with the phased introduction of automatic enrolment and the introduction of a new state pension from 6 April 2016. Those reforms were introduced in an attempt to address three key issues: increasing life expectancy, gender inequality and the need to ensure that the state pension system remained affordable and sustainable in the long term. Successive generations have been spending longer and longer in retirement as a result of increasing life expectancy, advances in medical care and healthier lifestyles. Whilst that has been one of the success stories of the last 50 or so years, the challenges posed by an ageing society cannot be ignored, not only for pensions but for health and social care. The increasing proportion of adult life spent in retirement means additional financial pressures on state pension funding. The state pension scheme operates on a pay-as-you-go basis. Today’s workers pay for today’s pensioners, but the proportion of pensioners relative to the total population is increasing. For example, in 2012, there were around 4·3 people of working age for each person aged 65 or over; that ratio is expected to fall to 3·4 by 2022 and to 2·4 by 2037.

When the contributory state pension was introduced in the 1940s it had a differential state pension age – 65 for men and 60 for women. However, the five-year gap in men's and women's state pension age could no longer be justified in a world where women increasingly play a role equal to that of men in the economy and National Insurance credits provide pension protection for those unable to work. The Pensions (Northern Ireland) Order 1995 provided for a phased increase in women’s state pension age to 65 between April 2010 and April 2020. The 1995 Order did not impact on anyone aged 44 or over at the time of the announcement and gave the women affected 15 years in which to prepare for a later retirement. The planned equalisation of state pension ages also ensured that the United Kingdom met its obligations under European law, which required a progressive implementation of the principle of equal treatment for men and women in matters of social security. Maybe it was on that point in respect of the EU that the Member wanted me to give way.