State Pension Age Equalisation

Rupa Huq Excerpts

Wednesday 2nd December 2015 Westminster Hall

[Barbara Keeley (Worsley and Eccles South) (Lab)]

I beg to move,

That this House has considered the effect of state pension age equalisation on women born in the 1950s.

It is a pleasure to serve under your chairmanship, Mr Davies. I start by paying tribute to my hon. Friend the Member for Denton and Reddish (Andrew Gwynne), who was the first MP to raise this issue in Parliament in this Session. The debate is about the effect of the changes to the state pension age imposed on women born in the 1950s by the Pensions Act 1995 and the Pensions Act 2011, and I will focus on three areas: the acceleration of changes to the state pension age; the lack of appropriate notification from the Government; and the impact of the changes.

State pension age equalisation started with the 1995 Act. The then Conservative Government set out a timetable to equalise the pension ages for men and women at 65. From April 2020, women born in April 1955 or later would get their pension at 65. In May 2010, the coalition agreement stated:

“We will phase out the default retirement age and hold a review to set the date at which the state pension age starts to rise to 66, although it will not be sooner than 2016 for men and 2020 for women.”

That pledge was broken when the coalition Government decided to accelerate the planned changes, a move that would particularly hit women born in the 1950s.

[Dr Rupa Huq (Ealing Central and Acton) (Lab)]

My hon. Friend is making a powerful speech. Does she agree that the people who are treated most iniquitously are those born in 1954? My constituent Michele Carlile of Hanger Hill says that an extra six years were hiked on to her pension age with no warning. That generation did not have the equal opportunities that created independent pension funds, and they did not have free nursery places; they had bad divorce settlements from men. This is another example of how this Tory Government have treated women shoddily.

[Barbara Keeley]

I agree, and I thank my hon. Friend for making those points so early in the debate.

The changes brought about by the 2011 Act affect the lives of millions of women born in 1954 and throughout the 1950s who are unfairly bearing the burden and the personal costs of increasing the state pension age. The changes were controversial at the time, and there was great debate about the need to address the unfair consequences of the Act. Speaking to Channel 4 News in May 2011, the director general of Saga said:

“Men won’t have any increase before 2018 and no man will have his pension increased by more than one year. Half a million women will. We accept that the pension age will have to rise but it is the timing and the broken promise that we feel is unfair. No money will be saved during this Parliament, so it’s got not about cutting the deficit. We don’t need to hurry this through to have a sustainable pension system…Many women are furious and desperate about how they are going to manage, particularly the more vulnerable women who may already have retired, who may be ill or be caring for someone. They may have made careful plans for retirement, only to have the Government pull the rug from under their feet. They can’t just work for longer, because they may have retired already.”

--- Later in debate ---

[Barbara Keeley]

The hon. Gentleman is quite right and I will come on to cases of how people are managing, citing my constituents and other people I have heard from.

Some of the women affected have been hit twice: by the original proposals in 1995 and by the acceleration of the changes through the Pensions Act 2011. Now they are angry and feel that they are bearing a disproportionate burden, as the hon. Gentleman has just said.

The acceleration of the changes to the state pension age can mean that women born just months apart, and who were possibly in the same class group at school, receive their state pension at very different ages. In some cases, a one-year difference in date of birth can mean a woman will receive her state pension three and a half years later than other women. The campaign group Women Against State Pension Inequality tells me that it is not campaigning against the equalisation of the pension age in itself; I think hon. Members will understand that that equalisation was going to happen. It is opposed to the way the changes have been enacted and to the lack of transitional protection for the women born in the 1950s who are hit hardest by the changes.

The women affected put their faith in a state pension system into which most of them had paid all their working lives. They expected that they would be treated fairly and that they would be told about major changes with sufficient notice. However, most of them were given short notice of these changes and some of them have received no information at all. The women affected believe that the Government have failed in their duty of care by not taking reasonable steps to ensure that they were notified individually and in a timely way. They have been left with inadequate time to plan for a major change to their financial circumstances, which has caused great uncertainty and worry for those who have been planning for retirement.

A number of constituents have given me examples that show the significant impact these changes are having on their lives. One of them has worked for more than 44 years and raised two children. She suffers with osteoarthritis. She tells me she that she suffered the indignity of having to attend the jobcentre, only to be told that she was entitled to just six months’ jobseeker’s allowance. Now she is unable to find work and has to use her hard-earned savings, which is a similar point to the one that the hon. Member for Kirkcaldy and Cowdenbeath (Roger Mullin) made earlier. My constituent told me:

“I must watch my savings dwindle on living costs rather than enjoyment, I wish I had not bothered being frugal all my life, as by the time I get my pension I will be broke or dead.”

Another constituent, Christine, is 61 and has worked since she was 15. She has osteoarthritis in both knees and has had a knee replacement. She cannot apply for her pension until 2019 and she told me:

“I am one of those women you would say is ‘old school’. Worked hard all my life, no maternity leave, no help with child care, just got on with it. Carrying on working thinking you will retire at 60, but since then my retirement age has changed 3 times. There is no guarantee it will not change again. I will probably be dead before I am able to retire.”

Another told me:

“At the age of 61, I find myself unemployed…If the Government had not moved the goalposts, I would have been able to retire last year. How are you supposed to live on £75 a week?”

She tells me that she has a mortgage and her outgoings are double the size of her income.

A constituent of a colleague told me that she was born in 1954, which is similar to the case already raised by my hon. Friend the Member for Ealing Central and Acton (Dr Huq), and that she was given only two years’ notice of the changes to state pension age. She is supported by her husband now, as she has no income of her own. She suffers mental ill health and has been unable to cope with the assessment process for employment and support allowance.

Case after case that I have been told about show how many women in their early 60s have health problems that stop them working, or that they need to give up work to care for someone else.

In an article on the gender gap in pensions, the Fawcett Society points out that the Chancellor appears to be delighted with the savings he made from his policy on state pension age equalisation, despite the really negative effects on women born in the 1950s, which I have been outlining. Speaking of the Government’s changes at the Global Investment Conference 2013, he said:

“These changes…the savings dwarf almost everything else you do, I mean they are absolutely enormous savings. You’re not necessarily reducing the entitlement of people who are retired, you’re just increasing the age at which that retirement entitlement kicks in”.

[Dr Huq]

Does my hon. Friend agree that this Government need to stop seeing people as just anomalies on a spreadsheet? The cases that she has highlighted are those of real-life individuals, and apparently there are 300,000 people born between 6 December 1953 and 5 October 1954 who have been hit twice by Tory pension changes, and these issues need addressing.

[Barbara Keeley]

Indeed, and as I was just saying, the Chancellor made the comment:

“You’re just increasing the age at which that retirement entitlement kicks in”.

He went on to say:

“It was actually one of the less controversial things we have done”—

amazingly—

“and yet it has probably saved more money than anything else we have done.”

That relates to the point that the hon. Member for Kirkcaldy and Cowdenbeath made about “choice”.