State Pension: Impact of Changes on Women

Part of Opposition Business – in the Northern Ireland Assembly at 6:15 pm on 26th September 2016.

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Photo of Jennifer Palmer Jennifer Palmer UUP 6:15 pm, 26th September 2016

This is an extraordinarily complex matter. I thank my colleague Andy Allen for bringing the motion to the House, and I will certainly support it. It is vital that we have had the opportunity to discuss the issue. The most recent changes to the women's state pension age will have a direct impact on around half a million women across the United Kingdom. Nobody would disagree that spending on pensions must be rationalised and must be sustainable for an ageing population. Pensions have the potential to be the millstone around the neck of future Governments if they are not properly funded and addressed. It is common sense that the Government must make sure that they are adequately resourced going forward.

That said, there are few things so clearly deserved as the state pension: the quintessential promise that, if you work hard for your whole working life, the state will take care of you in your old age is an ideal that has underpinned our society for more than 70 years. That promise is precisely the reason why I am so deeply worried about the manner in which the Government have decided to deliver the equalisation of pension age, and it is why I am speaking in support of the motion today.

Women born in the 1950s were made a promise; that promise has been broken. Worse still, it is being done with little or no notice. Women who have rightly been considering and planning for retirement now face a level of uncertainty that threatens what should be the most relaxed period of their life. While today's National Insurance contributions pay for today's pensions, many of those women believed that, when they started paying National Insurance contributions at the age of 16, they were entering into a social contract with the Government to retire at the age of 60.

Raising the retirement age is a necessary evil. With life expectancy climbing, it is unavoidable that we must work longer and retire later. Equally, because a far greater number of women today work on an equal footing with men, which we all support, the principle of equal state pension ages should be fair. The problem, however, is that while the principle may be sound, the reality is somewhat different. When Her Majesty's Government introduced the Pensions Act in 1995, women were supposedly given 15 years to prepare, as their pension age would not begin to equalise with that of men until 2010. However, no one aged 44 or over at that time was to be affected. It is, therefore, understandable that any discussion of pension changes was viewed as irrelevant. What was required from the Government at the time was a concerted effort to publicise the changes widely, spelling out the implications for the women affected, but this was glaringly absent. Compounding this, the Pensions Act 2011 increased the overall state pension age to 66 by 2020, accelerating the rate of increase for women. The previous lack of notification meant that it was only at this point that many women learned of the change. Some women who had anticipated drawing their pension at the age of 60 will not now reach the state pension age until they are 66.

I will put this in perspective: men will see their state pension age rise by one year between 2010 and 2020; the state pension age for women will increase by six years in the same period. The unfairness is made worse when we consider that the pension system already unfairly targets women, who, traditionally, are more reliant on the state pension as they have had less chance to build up a private pension due to the breaks in their working life to bring up children and the fact that they have lower incomes than men. It should be noted that men of this age could join company schemes, but women working part-time were banned from them. Yet it is the women who the Government expect to bear the brunt of the cost-saving measures designed to save money on pensions in the long term. It is, therefore, no surprise that the women affected by the changes are frustrated by the implications for their post-retirement planning, financial and otherwise.

The Government have substantially moved the goalposts without effective communication. This is an unfairness that must be addressed. There is a need for transitional payments to come into play. Consecutive Work and Pensions Ministers, Iain Duncan Smith, Stephen Crabb and, currently, Damian Green, have said that they are not for moving on the issue. In fact, this weekend, as mentioned by a Member who spoke previously, the Minister said that all pensioner benefits were under review, which sounds like we could see a further grab at pensions in the future.

In thanking all the contributors who spoke with passion, I pick out Andy Allen, who outlined the negative impact of this accelerated state pension timeline and focused on the human side of the changes. He called on the Government to introduce transitional payments to assist the disadvantaged. Carla Lockhart said that the implementation of the changes was clumsy and badly communicated, and she talked about people's mental health and well-being. Seán Lynch highlighted gender inequality and stated that some women were caught between certain age gaps. Mark Durkan said that this was a money-saving exercise from the Westminster Government and that it was unfair to force women to seek other employment. He asked for all parties to support the motion. Emma Pengelly said that women contributed highly to society and that many thousands of women are seeking jobs through job centres because of the unfairness in the pensions system.

I recognise that the power of the Assembly is constrained because, sadly, the issue lies primarily with changes made by the Government at Westminster. However, we have a voice and we can apply pressure. We can say that we feel that these women deserve to be treated as people and not as unfortunate rounding errors. They should not be disadvantaged solely because they had the bad luck of being born a year too early or a year too late. I must, therefore, back the motion and ask that the UK Government demonstrate some compassion and look again at this matter. I commend the motion to the House.

Question put and agreed to. Resolved:

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.

Adjourned at 6.21 pm.