Transitional State Pension Arrangements for Women

Carolyn Harris Excerpts

Monday 1st February 2016 Westminster Hall

[Helen Jones]

I need to make some progress, because lots of people want to speak in this debate and I do not want to take up too much time.

Let us remember that, way back, the Turner commission said that people should be given at least 15 years’ notice of changes to the state pension age. The Pensions Act 2014—we wait ages for a Pensions Act and then they are like buses; a load come along together—set up periodic reviews that aimed to give people at least 10 years’ notice. One could argue that, in principle, the 1995 Act gave that kind of notice, but lots of people did not know about it. There was no requirement under the Act to inform individual women who might be affected. Indeed, apparently what happened was that the Department produced a leaflet. That is very nice, but if people are going to request the leaflet, they must know about the changes coming forward. I certainly did not know that it existed, and I do not think anyone else did. There was an advertising campaign about preparing for retirement, but it was aimed at both men and women. It was not aimed specifically at those whose state pension age was changing. There were a few inserts and adverts in papers and magazines.

For most people, those things were background noise as they were getting on with their lives. No one wrote to the individual women who would be affected. It was not until 2009 that the Government started to do that, but that process was stopped in 2011 as we debated yet another Pensions Act to introduce more changes. That gross dereliction of duty on the part of the Department for Work and Pensions cannot be defended.

After the Pensions Act 2011 was enacted, the Government again began to write to people. They finished the process in 2013, but that meant that some women, if they were notified, received only between three and four years’ notice of changes to their pensions, which was not nearly enough time to make proper provision. In fact, some did not receive notification at all, as we have heard, because their letter were sent to their old address. Some received the wrong state pension forecast and they were not corrected.

Before she became Minister for Pensions, Baroness Altmann said that

“until recently, many of these women were expecting to receive their state pension at age 60, since they were unaware of the changes made in 1995”.

Indeed, the former Pensions Minister said the same thing. In 2015, when he gave evidence to the Work and Pensions Committee, he said that it was clear that there was a cohort of women who did not know about the changes and that

“there is no question about that.”

The rapid changes introduced by the 2011 Act have resulted in huge inequalities, because small differences between people’s date of birth may mean a big difference to the dates when they reach their pension age. Women born in the 1950s are particularly affected, and I am grateful to those women who have written to me with specific examples of what is happening. I shall quote some of them because I stress to the Government that this is not an academic exercise. Real people are on the receiving end of the changes and many of them are suffering.

One lady wrote to me pointing out that her husband was born in January 1954, meaning that he can retire at the age of 65 years and two months. She was born in August that year, but cannot retire until she is 65 years and 11 months. She said, “Whatever that is, it is not equality,” and it is not.

[Carolyn Harris (Swansea East) (Lab)]

Will my hon. Friend give way?

[Helen Jones]

I will give way, but then I want to make some progress.

[Carolyn Harris]

I congratulate my hon. Friend on securing the debate. If, in March 1953, Mrs Jones gave birth to twins, Jack would get £155 a week under the single-tier state pension, but Jill would get £131, because she was born a woman. Where is the justice in Jack getting £20,000 more over 20 years than his sister, Jill? That is ludicrous.

[Helen Jones]

My hon. Friend is right. The system is riddled with inequalities.

Many women have received wrong information. One lady who contacted me wrote:

“I have a pension calculation from the DWP telling me that I retire at 60 and this would not be reviewed until 2020”—

someone obviously keeps her paperwork carefully. She went on to say:

“I have had no notification or correspondence from the DWP informing me of these changes and have…just found out by applying for a State pension forecast…To be told at the age of 58 that you will not get any pension until you are 66 does not give enough time to plan or budget”—

she is right.

Many women have been caught out by the changes in the number of years’ contributions to national insurance required before receiving a full pension. One lady said:

“I was made redundant after 30 years and I contacted the NI people to ask about my contribution record…I was told because I had paid a full 30 years I didn’t need to pay anymore”.

She then found out that she

“was no longer getting a full pension but approximately £35 a week less because guess what I haven’t paid enough NI contributions in the last 7 years! I WAS TOLD I DIDN’T NEED TO!”

In any private pension scheme, that would be called mis-selling, but we see the same from the Government.

Another lady highlighted the fact that many of this cohort of women took time out to look after their children or to act as carers, meaning that they did not build up enough occupational pension. In some cases, women were not allowed to join occupational pension schemes at all and some were working before the Equal Pay Act 1970 came into force. She said:

“I am also penalised here because when I did return to work after my children were older I did not accrue enough to have a reasonable work pension…It is totally demeaning that I have to rely once again on my husband who is 67 this year and worked from the age of 18.”

That is not equality.

Another lady, who is also a carer, said:

“I will be 62 next month and found out that I will not be getting my state pension until I am 65 and some months. I made Choices in my mid fifties and gave up work to look after my husband expecting to only wait 5 years or so to get my pension but it came as a shock to find out that I wasn’t”.

People have made decisions based on information they were given at the time in good faith, but they then found that decisions had been overturned.