Transitional State Pension Arrangements for Women

Caroline Flint Excerpts

Monday 1st February 2016 Westminster Hall

[Caroline Flint (Don Valley) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. It is interesting to follow the hon. Member for Bath (Ben Howlett) because, if I heard correctly, he seemed to suggest that it would perhaps help the Government with the pension policy if we all died sooner. I congratulate my hon. Friend the Member for Warrington North (Helen Jones) on her contribution to the debate and on all the work she and many other Labour colleagues have put in.

How many times have we heard constituents say, “I’m not interested in politics. What has it got to do with me?” Well, here today we are debating political decisions on the pension age that have profoundly changed the law with regard to men and women. The fundamentals of the change to equalise the state pension age between men and women is not the problem. It is right that as the barriers to women working and saving for a pension were tackled in the 20th century, the anomaly between the retirement ages for men and women should be addressed too. While recognising the health inequalities that still exist, it is fair to reflect on the statutory retirement age and on what is appropriate, as we are all living longer overall, and to recognise that pension support must better reflect how we live our lives today and that funding must be sustainable in the future.

So what has gone wrong? Why are so many MPs from all parties concerned? How did the WASPI campaign manage to get more than 139,000 signatures on an e-petition, so as to be granted today’s debate? The problem is when politicians and senior civil servants forget that public policy making is only as important as delivery, especially when we expect the public to make important decisions affecting their lifestyle and future financial security. It is because of the lack of attention to delivery and to the impact on women’s lives that the genuine and widespread concern of the many women and their families affected by the changes has struck such a chord.

Sometimes laws require relatively little of the public, but pension changes need the public to engage with how they will be affected and what they need to do ensure that they can retire with security. For that reason alone Governments have a huge responsibility to do as much as possible to ensure a smooth transition.

The first increase in women’s state pension age was introduced by the Pensions Act 1995, but the plan was that the change would not start until 2010 and that it would take 10 years to complete, so that by 6 April 2020 women’s state pension age would be 65 and equal to that of men. Perhaps the thought of 25 years between 1995 and 2020 led to a complacency in Whitehall that has exposed the lack of priority given to ensuring that women were informed and prepared. One letter, even if it gets to the recipient, is not enough. Receiving such a letter at 58—even at 59—saying that the pension age of 60 has been delayed, has left many women unprepared for retirement, after decades of work.

[Mr Pat McFadden (Wolverhampton South East) (Lab)]

My right hon. Friend is making a good point that is not just about the principle of equalisation, but the speed and sharpness of the increase. That is what has been the focus of so much anger and frustration. Does she agree with my constituent Mrs Cox, who points out that it is not just about the state pension, but other benefits, such as bus passes in some parts of the country, continued national insurance contributions and winter fuel allowance? It is not just one hit on the women affected, but several, and that is what has made them so angry.

[Caroline Flint]

I absolutely agree with my right hon. Friend. The problem has been compounded by the coalition Government’s decision to speed up the introduction of the equalisation of the pension age and to increase the state pension age. Those changes were made without any sense of how aware and ready women were.

[Martin John Docherty (West Dunbartonshire) (SNP)]

Will the right hon. Lady give way?

[Caroline Flint]

No, I am going to make some progress. I want to share the story of a constituent from Cantley, Margaret Quilter. When the Pensions Act gained Royal Assent on 14 May 2014, it was two months before Margaret’s 60th birthday. That Act pushed the date of her reaching state pension age from November 2018 to May 2020. Margaret was not notified of that change and nor was her occupational provider, the teachers’ pension scheme. All correspondence from that scheme used the 2018 date. Margaret has more than 40 years of national insurance contributions, but she was contracted out, as so many were. The amount of years of NI contributions required has also moved, and she believes that that led her to making judgments based on inaccurate information. Margaret’s is a classic case: she expected to retire at 60, then 61 and a half. That became 64 and then nearly 66.

Margaret believes that by equalising pensions at the finishing line, Governments have failed to acknowledge inequality from the start. As she told me, when she was working she barely broke even paying out for childcare for her two children, but she thought it worthwhile to keep working and to keep contributing. In her 50s, she found her retirement age was to be delayed, but at the same time her work opportunities were beginning to dry up. She feels let down. Having been assured in 2014 that there would be 10 years’ notice of future rises, at 61, having requested a forecast, she discovered the third increase to her state pension age.

[Margaret Ferrier (Rutherglen and Hamilton West) (SNP)]

Will the right hon. Lady give way?

[Caroline Flint]

I will not give way, because of the time. My constituent Margaret recognises that she is more fortunate than many. When she had been retired from teaching for a year, the teachers’ pension service wrote saying that it used the state pension age of 64—not the state pension age of 66—in its pensions calculation letter sent in July 2014, as changes in the state pension age were not in the public domain. That forecast letter stated that the state pension age was unlikely to change, but it did four months later. Seriously, if an established occupational pension scheme cannot advise clearly in July 2014, is it any wonder that so many women have found themselves unprepared for the changes to their financial and social wellbeing? Margaret has never received any information directly from DWP. She has requested all the information herself.

It is clear that mistakes have been made. Sometimes Governments get it wrong and sometimes Departments mess up. In those cases, they should try to put things right. I hope that after today’s debate, the Government will consider transitional arrangements to soften the blow. I also hope that lessons will be learned, across all levels of policy-making, about treating changes of this magnitude as a major project in which the people affected should be at the forefront of planning for change.

--- Later in debate ---

[Mr Vara]

No, I will not give way. A number of points have been made. I have listened very carefully for just under three hours and I am keen to put the Government’s views on record.

[Caroline Flint]

The Minister is wasting time when he could have taken an intervention.

[Mr Vara]

The right hon. Lady is a former Pensions Minister, so—

[Caroline Flint]

No, I am not.

[Mr David Hanson (in the Chair)]

Order. I call Mr Vara to continue.