Ahead of leading today’s debate in Parliament on ‘Government proposals to raise the state pension age for women’ Teresa has written the following article for ePolitix:
The Pensions Bill will shortly be introduced into the House of Commons. Its first clause proposes to accelerate the equalisation of the state pension age between women and men. Whilst there is an acceptance across the main political parties that the state pension age should rise to reflect growing life expectancy, there are around 500,000 women born between October 1953 and March 1955 who will be badly affected by this proposal. Some of these women, who are only a few years away from their planned retirement date, will have to work up to 2 years longer than they were expecting to and could lose around £10,000-£15,000 of pension income. Many of these women understandably feel they are being discriminated against just because they were born at the wrong time.
In today’s Westminster Hall debate I will talking about the unfairness of the government’s proposal and the wider implications it has for our pension system. The proposal is unfair because it has been sprung on these women at the last minute. It was in neither the Conservative nor Liberal Democrat party manifestos at the general election; nor was it in the coalition programme for government. Back in 2005 the Turner Commission recommended that women should be given 15 years to prepare for the changes. However, under the government’s plans these women are being given less than 7 years preparation time.
Many of the women affected by this Bill have worked hard for around forty years, paying their National Insurance contributions and looking forward to their retirement. Many have already started to reduce their hours at work or have taken on extra caring responsibilities in expectation of their retirement date. They are rightly shocked and angry that the government has decided to move the goal posts for them at the last minute.
As well as being deeply unfair to these women, I believe the government’s proposal will have wider implications. Pension policy needs to be planned in the long-term through reviews like the current Workplace Retirement Income Commission led by Lord McFall. The government’s hasty approach means that key issues will be missed. For instance, although overall life expectancy is rising there are still deep regional and socio-economic inequalities. Working-class women will be hit hardest by the accelerated timetable because their lower life expectancy means they will get less time to enjoy their retirement. This is just one of many factors the government should be considering.
Another concern is that this proposal will undermine the more positive aspects of the Bill, such as automatic enrolment in a workplace pension scheme and the creation of the National Employment Savings Trust (NEST). These measures are trying to boost confidence in our pension system and address the low-take up of pensions, particularly amongst low-income workers. It will make it much harder for the government to achieve this when they are seen to be unfairly changing the pension rules at the last minute. The minister needs to look at the big picture and drop plans to accelerate the equalisation of the state pension age.
The article can be viewed on the ePolitix website here.