Terminal Illness: Early Access to Pensions

Margaret Ferrier Excerpts

Tuesday 2nd May 2023 Westminster Hall

[Dave Doogan (Angus) (SNP)]

I beg to move,

That this House has considered early access to pensions for people with a terminal illness.

It is a pleasure to serve with you in the Chair, Mr Sharma. In the United Kingdom, it is not possible under any circumstances to access a state pension before retirement age—not even if a person has paid national insurance contributions for the full 35 years, is terminally ill, and have less than a year to live. The purpose of the state pension is to support all of us towards the end of life, at a time when we are less capable or incapable of work, yet people with a terminal illness, who are nearing the end of life and, in the majority of cases, are no longer able to work, are not entitled to draw on their state pension, regardless of their contributions, financial difficulties or personal or family situation.

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

Terminal cancer patients who have surpassed their life expectancy have been told by firms such as Legal & General that they are ineligible to access their pension early because they may live longer. People are being punished for defying their life expectancy. Does the hon. Gentleman agree that people with a terminal illness should be given the dignity and respect of being able to access their own pension early?

[Dave Doogan]

I absolutely agree. Dignity and respect is at the heart of that ambition, as she so clearly articulates.

I start the debate with an appalling statistic. More than a quarter of people who die before retirement age spend their final days in poverty. In my Angus constituency, that figure is 24%. It is awful to think that for so many people with terminal illness, their last days are filled with worry and fears that go beyond the illness with which they have been diagnosed. Marie Curie reports that many terminally ill people feel stress about keeping a roof over their head, paying for their children’s school uniform or the energy use of their specialist medical equipment. As far as possible, the last days of life should be spent surrounded by friends and family, making happy memories in comfortable surroundings.

My constituent Ian Bain, from Forfar, was diagnosed with motor neurone disease in 2014. Mr Bain worked his entire life. He started work in 1977, and accrued 41 years of national insurance contributions—six more than necessary to entitle him to a full state pension on retirement. When he stopped working due to illness, there was no way for him to access his state pension, because he was not yet 65. Due to Department for Work and Pensions delays, he also did not receive any social security payments until nine months after applying. Mr Bain was not entitled to claim under the special rules, as he had been advised that he had more than six months left to live. When he did eventually start receiving payments, he received them only at the lower rate of the personal independence payment and employment and support allowance.

Although Mr Bain had been diagnosed as terminally ill by a medical practitioner, he was required to return annually for follow-up assessments to see if his incurable degenerative condition had improved. He was even informed by one assessor that he “looked well”—cold comfort if ever there was. It was only in 2021 that Mr Bain started receiving the higher rate, when he was moved to the Scottish Government’s adult disability payment. Mr Bain can no longer speak to me on the telephone and has to use a single finger to email me. He should not face the indignity and stress of continually having to jump through bureaucratic hoops for a pittance, while the pension that he has so completely paid into for decades is denied to him by the tightest of all fists.

Sadly, Mr Bain’s situation is far from rare. Another Angus constituent, Ross, told me that his father

“died of cancer in 2019 just 2 days before being able to draw on his pension, he had spent his whole life working. He paid his contributions religiously from the day he was able to work and got nothing back.”

My constituent Malcolm advised:

“When you hear someone tell you that you have cancer, you immediately think you are going to die. That thought automatically triggers the need to make sure for the provision for your loved ones. The only thing we should have to deal with is building up happy memories for those left. This is more difficult when money is in short supply due to escalating costs.”

Another Angus constituent said that her husband died of a glioblastoma

“4 months before he retired. He worked his entire life and was never off sick or claimed benefits once. Once he was diagnosed I had to battle to get assistance. He should have been able to access his state pension early.”

It would have made all the difference. She continues:

“it would have helped with the financial strain.”

Access to funds for the terminally ill is a problem across these islands. People are twice as likely to die in poverty if they are terminally ill and under 66 years of age. The reasons for this poverty are well understood. People with terminal illnesses very often cannot work. Two thirds of terminally ill people rely on benefits as their main or only source of income. At the same time, costs can often increase dramatically at the end of life. The additional cost of terminal illness can reach up to £16,000 a year. There is often a need for energy-intensive specialist medical care in the home. Many people need to keep their home warmer, and their energy bills increase dramatically. All of us in the United Kingdom are exposed to inflationary pressure and sky-high energy costs, but for the terminally ill, the situation is permitted to become even more dire.

The Scottish Government have acted to mitigate some of the financial and bureaucratic pressure on those experiencing terminal illness. Scotland is introducing its own extra costs disability assistance benefit, having already introduced the child disability payment and adult disability payment, which replace the disability living allowance and personal independence payment. It is working towards the introduction of a further payment to replace the attendance allowance.

The Scottish Government have also changed the definition of “terminal illness” used to allow access to benefits from the 12-month special-rule definition used in England to an indefinite definition that includes all people diagnosed with a terminal illness. This allows people to be fast-tracked to receive the highest rate of payment as quickly as possible, and for longer. The central principle of the approach is to ensure that terminally ill people are provided with the support that they need, when they need it. That approach represents nothing more than the dignified acceptance of a terminally ill person’s circumstances. It is simply doing the right thing. Those changes are welcome and will do much to improve the experience of those with a terminal illness living in Scotland, but the fact remains that their state pension is kept from them, no matter how long they have paid into the system. The Scottish Government have no power to intervene when it comes to that injustice.

People with terminal illnesses have often paid enormous amounts of national insurance. On average, people aged 20 to 64 who are in their last year of life have accrued 24 years of national insurance contributions, and will never see the benefit of that investment, yet the path to improving the situation is straightforward and affordable. France, Germany, Italy and Spain all provide for early access to the state pension in the event of disability, and for those found to have a terminal illness.

Research conducted by Loughborough University found that giving working-age terminally ill people access to their state pension could almost halve the rate of poverty in that cohort, lifting more than 8,600 people a year out of poverty at the end of their life. That change would be not only effective but extremely affordable. It is estimated to cost £144 million per year—just 0.1% of the annual state pension bill—and would make an immeasurable improvement to the dignity and life of some of the most vulnerable people in our communities, and their families. It is also fair. People pay into a state pension their whole life to ensure a comfortable end of life, but when they reach end of life, the UK Government tell them that they will keep the money. How can that be? To put it another way, the UK Government are saving £144 million per year by withholding access to state pensions from terminally ill people. That is unconscionable.

Members not just from my own party but from across the House have asked the UK Government to consider permitting terminally ill people to access their state pension, regardless of age. Many Members in this debate and beyond fear that the Minister’s response will echo previous Government responses—that she will say that terminally ill people already get access to benefits, or that those in their final years of life will have their applications fast-tracked. Those measures have failed to avoid the extraordinarily high rates of poverty among the terminally ill, they do very little for those diagnosed as having more than 12 months to live, and they are clearly insufficient in supporting people during what can be one of the most devastating and frightening periods of anyone’s life.

I hope that the Minister will give this humane and decent aspiration the due consideration it deserves, and that the Government will change the rules for terminally ill people not just in Angus but across these islands.

[Drew Hendry (Inverness, Nairn, Badenoch and Strathspey) (SNP)]

It is a pleasure to serve under your chairmanship, Mr Sharma. I wish that more Members had attended this very important debate so that I could sum up some more contributions, but I thank my hon. Friend the Member for Angus (Dave Doogan) for securing it and delivering a powerful speech in which he entreated the UK Government to act with compassion. It is vital that terminally ill people are finally given the respect they deserve in UK Government circles.

When terminally ill people get their diagnosis, they are absolutely devastated, and so are their families. It is a situation that none of us wants to face, and nor do we want members of our family to face it. It is absolutely devastating, and grief kicks in immediately. That is just one of the pressures facing terminally ill people and their families, which my hon. Friend laid out.

[Margaret Ferrier]

Terminal illness puts an emotional, mental and financial strain on the individual and their family. More than four in five families living with advanced cancer face income losses as a result. Does the hon. Gentleman agree that allowing early access to pensions will enable people with terminal illness and their families to focus on the quality of their end-of-life experience and not worry about money?

[Drew Hendry]

The hon. Lady is absolutely right. This should be about making the people who are facing this most dreadful situation and their families as comfortable as possible and helping them to move forward. The cost is small, although as my hon. Friend the Member for Angus said, by not paying out the £144 million a year, the UK Government are running a lottery; they hope to get that dividend in from people. That is a small amount for dignity and fairness for the people in that situation and their families.

My hon. Friend shared the damning statistic that terminally ill people are twice as likely as others to die in poverty. They have bigger costs; it costs more to be terminally ill. For a start, they are ill, and most are homebound, which increases energy costs. There is the cost of the adaptations that they have to make, and increased costs for their families, who have to visit more to provide support.

The issue should be very simple for the UK Government. I am chair of the all-party parliamentary group for terminal illness, and although our entreaties about the six-month rule were listened to—on every occasion, Ministers said, “Yes, we must do something about this”—the change to 12 months took years in which thousands of people died waiting. I welcomed the change from six months to 12 months because it made life marginally more easy for people, but the fact that the effect is marginal—the very minimum that could be done for terminally ill people—is the most damning thing about this. As has been stated, this is about fairness and dignity, and people’s ability to have a quality end of life. The power is with the UK Government to make a very simple and fair adjustment. As has been underlined, in the scale of things, the cost is small, but the scale of the impact on the lives of people who are terminally ill and their families is enormous.

Nobody is asking for things that people have not earned; these pensions are something that people have earned throughout their lives. The Government can look at it this way: when someone gets that devastating note that says they are terminally ill, the Government know they will save money from the fact that that person is not going to be around for years collecting their state pension. Therefore, the Government can at least make this gesture towards making people’s lives easier. Why do we not see more compassion from the UK Government over this very simple matter? People are dying; why not treat them the way they should be treated? Why not strain every sinew and make every move to ensure that people in this situation have the best possible end of life? It is one thing that all of us could achieve by working together, and that the UK Government could commit to.

We heard about the tragedy of Mr Bain, a constituent of my hon. Friend the Member for Angus, who spent 41 years paying into his pension. He earned it but he is not going to get it. Think of my hon. Friend’s other constituent, Malcolm, who is quoted as saying when his diagnosis of cancer came in, “You immediately think you are going to die.” Of course he thought that, with that diagnosis. People are going to die; the problem is that, with the best will in the world, doctors cannot put a definitive timescale on when. However, they can often say that, “You are going to degenerate and your life is going to get more difficult as you go towards the end of life.”

This is a simple act. State pensions are reserved to the UK Government, so only they can act on this for people in Scotland and the other nations of the UK. Other nations can, as we have heard, make provisions like this; they can do the right thing for people. My hon. Friend the Member for Angus laid it out very clearly, but I will say it again: this is not a mammoth choice, and it is not going to destroy the UK budget. It is a small step that, along with other measures, should be taken to assist people who are terminally ill and their families.

When the Minister sums up the debate and answers our questions, I ask her not to just give out platitudes and promises of long-term action, as we have heard so many times before from so many other Ministers in the UK Government. I am not saying she will do that, but I believe the debate deserves answers on how she will take the issue back to her Department and work out a proper plan for people who are terminally ill and their families, so they can have the dignity, respect and fairness they deserve. She can give a reassurance that she will fight tooth and nail to get state pensions released for people who are terminally ill.