Briefing regarding the impact of legislation increasing the State Pension age for women born in the 1950sJump to full report >>
The Pensions Act 1995 provided for the State Pension age (SPA) for women to increase from 60 to 65 over the period April 2010 to 2020. The Coalition Government legislated in the Pensions Act 2011 to accelerate the latter part of this timetable, starting in April 2016 when women’s SPA was 63 so that it will now reach 65 in November 2018. The equalised SPA will then rise to 66 by October 2020. The reason was increases in life expectancy since the timetable was last revised.
The Government initially intended that the equalised SPA would then rise to 66 by April 2020 (Cm 7956, November 2010, Foreword). However, because of concerns expressed at the short notice of significant increases for some women (as much as two years compared to the timetable in existing legislation) the Government made a concession when the legislation was in its final stages. This limited the maximum increase under the Act at 18 months, at a cost to the Exchequer of £1.1 bn - see Library Briefing Paper, SN 06082 Pensions Bill 2011 – final stages (November 2011).
Some women born in the 1950s argue they have been hit particularly hard, with significant changes to their SPA imposed with a lack of appropriate notification. The campaign Women Against State Pension Inequality (WASPI) is calling for “fair transitional state pension arrangements,” which they say translates into a ‘bridging pension’ paid from age 60 to SPA. Other proposals include changes to the 2011 Act timetable.
In a March 2015 report on Communication of State Pension age changes, the Work and Pensions Select Committee concluded that “more could and should have been done” to communicate the changes, especially between 1995 and 2009. It called on the Government to “explore the option of permitting a defined group of women who have been affected by state pension age changes to take early retirement, from a specified age, on an "actuarially neutral basis”. It launched an inquiry to explore this further.
The issue has been debated in Parliament on a number of occasions and an all Party Parliamentary Group on State Pension Inequality for Women has been set up to “hold the government to account on the issue of transitional arrangements to compensate 1950s women who are affected by changes to the state pension age and to campaign on issues around the state pension age.”
The Government argues that the changes in the 2011 Act were debated at length and a decision made by Parliament, as part of which a concession was made to limit the impact on those most affected. It says it will “make no further changes to the pension age or pay financial redress in lieu of a pension.” (PQ 49721 27 October 2016; HC Deb 15 November 2016 c48WH.)
Leader of the House David Lidington confirmed this position on 26 January 2017, saying:
The coalition did commit more than £1 billion to lessen the impact on those who were the worst affected by the change in pension age. No one will see their pension age change by more than 18 months. Those who face the largest increase in the state pension age received at least seven years’ notice. However, we must also be realistic about the fact that people are living longer and that, if we are going to equalise the state pension age, we need to raise the state pension age both for men and women. The cost of reversing the Pensions Act 2011 would be more than £30 billion. (HC Deb 26 January 2017 c467)
A Westminster Hall debate is scheduled for 9 February 2017 on the “effect of state pension changes on working-class women” in the name of Chi Onwurah. She raised the issue in Parliament on 2 February, asking:
What discussions [the Minister] has had with the Secretary of State for Work and Pensions on the effect of recent changes to state pensions on the income of working-class women in retirement.
The Parliamentary Under-Secretary of State for Welfare Delivery (Caroline Nokes): Women reaching state pension age in 2016-17 are estimated to receive more state pension on average over their lifetime than women ever have before. By 2030, more than 3 million women stand to gain an average of £550 a year through the introduction of the new state pension.
Chi Onwurah: Working-class women are more likely to be in manual trades, which take a greater toll on the body as it ages, and to die younger due to the health inequalities from which we still suffer. The Minister did not mention the word “class” in her reply. Will she say right now that she will ensure justice for working-class women and all WASPI women by giving them a fair deal in the spring Budget?
Caroline Noakes: The equalisation of the state pension age has been well rehearsed in this Chamber; and, no, I will not use the word “class” because, to be quite frank, we are all working now. (HC Deb 2 February 2017 c1171).
More information can be found in the following Library Briefing Papers:
The tables below show i) how the State Pension age has changed for women with different dates of birth; and ii) figures for the number of women affected by the Pensions Act 2011, by constituency.
Commons Briefing papers CBP-7405
Authors: Djuna Thurley; Richard Keen