Women the losers in pension reforms

Posted by Olderiswiser Editorial

Women born after April 1951 the big losers in changes to the state pension age.

Pension reform and freedom has been high on George Osborne's list of priorities since he first got the keys to 11 Downing Street. However, where he has appeared to give with one hand, he has certainly taken away with the other. Among those who stand to lose most are women born after 6 April 1951; Changes to the State Pension Age (SPA) mean they will no longer be entitled to retire and claim the state pension when they reach 60 years of age.

With more people living longer, the prevailing feeling is that equalisation of the state pension age for both sexes and an increase to the agreed SPA was a necessary step to cope with our increased longevity. The timeline to these changes, though, was accelerated in the 2011 Pension Act. The impact is felt most acutely by a generation of women (born in the 1950s), many of whom were told they would have to work another 18 months to qualify less than two years before their retirement date.

WASPI (Women Against State Pension Inequality) has called on the Government to apply a fairer transition of the state pension age. The group's petition, which has collected more than 163,000 signatures, says WASPI “agree with equalisation, but don’t agree with the unfair way the changes were implemented – with little/no personal notice … faster than promised … and [with] no time to make alternative plans. Retirement plans have been shattered with devastating consequences.”

Successive governments have failed to address the implication of the cost of pensions coupled with an ageing baby boomer generation. The current state pension changes are long overdue and there will inevitably be losers in the transition as the government pushes through reforms.

Tom McPhail, Head of Retirement Policy at Hargreaves Lansdowne explains: “The government appears determined to stick to its guns, arguing that the policy of raising state pension ages is the right one, that it took reasonable steps to communicate with those affected, the issue was adequately debated at the time and that there is no money available for any kind of transitional arrangement. The campaigners have built up a considerable head of steam and have widespread support; the challenge will be to make the case that there are individual groups of women who do indeed have legitimate grounds for a transitional arrangement and specifically how it could be paid for.

The cost of any government concession could very quickly run into £billions so it is hard to see how the government could give any ground without some off-setting measure elsewhere, such as raising further the retirement age for subsequent generations.

At the last debate in the House of Commons on 7th January, the government showed little interest in actively engaging in the debate at all, with the motion being won 158-0. ”

However, there remains strong and vocal support for a rethink on transition and increased support for those affected. Mhairi Black MP outlined why she is opposed to the SPA change and how it could push older women onto benefits. 
 

 

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