State Pension  

Labour to offer reduced state pension at 64

Labour to offer reduced state pension at 64

Labour shadow work and pensions secretary Debbie Abrahams is set to announce plans for women born in the 1950s to access a reduced state pension at the age of 64.

The proposal is described by the Labour party as ‘cost neutral in the long run’ and Ms Abrahams is set to say the change should be made ‘immediately’.    

The 1995 Pensions Act increased women's state pension age from 60 to age 66 to bring it in line with men. 

Any woman due to reach age 60 before 2010 kept her pension age. 

Women born after 6 April 1950 saw their state pension age gradually rise until those born after 6 April 1955 had their state pension paid from age 66 just like men. 

Waspi (Women Against State Pension Inequality) have argued around 2.6 million women lost out because of the changes to pension law. 

But Royal London’s director of policy, and former Liberal Democrat pensions ministers, Steve Webb has warned that the proposal faces serious practical problems.   

He said: “Writing new primary legislation, getting it through Parliament, and implementing the change on the ground is likely to take at least two years.   

“If this legislation completed its passage through parliament during the 2018 to 2019 session, it would take at least another year to change government computer systems and to communicate effectively to all those who might be affected.   

“By the time the new law could be implemented, most of the women who had the shortest notice of state pension age changes would already be drawing a state pension.

“Under equalities legislation it is unlikely that this new option could be made available only to women.

“In addition, there are serious practical problems with allowing people to opt for an early pension which is permanently paid at a lower level than the full state pension.   

“For example, if the scheme is to be cost neutral, they would not be allowed to claim pension credit or other benefits to top up their low income.  But if they could not do so then they could be living permanently below the poverty line throughout their retirement.”

The Labour Party is also set to say today (25 September) that it wants to impose a cap on interest payments on consumer credit card debt, warning levels of debt are a threat to the economy.

emma.hughes@ft.com