Waspi’s campaign for fairness in state pensions for women has been the result of a lack of proper communication of the original 1995 Pensions Act, Steve Webb has claimed.
The director of policy for Royal London and former pensions minister, said a communications breakdown in the late-1990s was responsible for the furious reaction of the Women Against State Pension Inequality (Waspi) campaign.
Speaking to Julia Faurschou, reporter for Investment Adviser, Mr Webb said: “The big changes in women’s pension ages came in the 1995 Pensions Act. This did most of the changes.
“The 2011 Act, which I was responsible for, did not add any more than 18 months to people’s pension age, typically 12 months.
“But when we did write to people - and we did write to them to tell them what changes we have made - this was the first time they had heard about the first changes.
“So instead of me writing to them to tell them there was an extra year on the pension age, we were effectively telling them they had six extra years added to their pension age, which is of course why they were outraged.
“The biggest thing was the failure to communicate the 1995 Act; the Act itself wasn’t a bad act, and if people had known about it, they would have had 25 years’ notice, but the problem was people just didn’t know about it.”
On the subject of how people are to fund their pension, Mr Webb said: “We are focusing on those who intend to fund their entire retirement by downsizing the home in which they live.
“There is survey evidence that approximately three million people do not want to bother with a pension and instead want to invest in their lovely family home, downsize at retirement and then spend the money to fund their retirement.
“This sounds sensible but the more we looked at this the more risks we could see. For example, the value you could get in a house in most parts of the country, and then downsize into something you would wish to live, just doesn’t add up.”
Mr Webb added there could be huge issues with a lack of diversification, particularly if there were a downturn in the housing market and the value of the property should fall. He added: “It just isn’t the dream that it seems.”