A group of MPs is proposing a series of solutions for women affected by an increase in the state pension age, which are aimed at the poorest and won’t include a bridging pension solution.
The All-Party Parliamentary Group (APPG) on State Pension Inequality for Women, led by Labour MP Carolyn Harris, announced on Friday (27 April) the proposals it will include in its private members’ Bill, which is tabled to be discussed in Parliament on 15 June.
Their goal is to get the government to review pension arrangements for women born in the 1950s who have or will be financial disadvantaged by changes to equalise the state pension age between men and women, and consider costings for three solutions.
The first option is making a non-means-tested pension credit available to all women age 63 and over, from the day it is approved until they reach state pension age, which won’t be backdated.
The qualifying age for Pension Credit minimum guarantee is aligned to women’s state pension age, currently at 65.
This would have a cost between £0.1bn to £1.9bn, according to an FOI request made to the Department for Work and Pensions (DWP) in 2016.
The APPG second solution is to equalise women’s pensions, so that everyone receives a full state pension (£159 per week) regardless of the number of years of National Insurance contributions they have accrued.
Last, but not least, the MPs want to extend pension credit for those women worst affected who have no other income or private pension available to them and are suffering financial hardship.
The impact of the last two measures hasn’t been costed, however.
The APPG isn't, however, considering the request of the Women Against State Pension Inequality (Waspi) movement, the biggest group of women who claim they have been severely disadvantaged without warning by changes forcing them to work longer before receiving the state pension.
The group original's demand back in 2015 - for the government to keep the state pension age at 60 for women born in the 1950’s, which would have a cost of £77bn - has been dismissed by the government.
Waspi is now campaigning for transitional arrangements.
According to Anne Keen, co-founder of the movement, "this translates into a bridging pension to provide an income from age 60 until state pension age - not means-tested - and with recompense for losses for those women who have already reached their SPA".
She added: "There are no specific age groups within the period mentioned above that are favoured above others”."
Over 100 groups representing 1950’s born women affected by changes to the state pension age took part in this consultation, which was discussed in a meeting in Parliament on Wednesday (25 April).
These women claim that there were failures of communication on behalf of the DWP to inform women back in 1995 that the state pension age was set to increase.
Even in 2011, with the new Pensions Act, they claim information about the change was not widely disseminated, meaning many women had not made enough provision to compensate for the unexpected gap between the age at which they actually retired, and the new, higher, date at which the state would start paying their expected pension entitlements.
According to John Ralfe, independent pensions consultant, only the third proposal has any chance of being approved by government.
He said: "The first proposal could be ineffective. Let's assume that the government goes with that, by the time it happens, in three or four years, a lot of the women born on the 1950s would have reached their retirement.
"The second proposal won't happen, because it is fundamentally at odds with the 2014 Pensions Act, which set up the new state pension.
"The third one might stand some chance. This seems to be what has been proposed quite a long time ago by Labour MP Rachel Reeves, when she was shadow secretary of state in 2011. It is means tested and very modest, so from the three proposals it is the only one that stands any chance of happening."
However, Mr Ralfe doesn't believe there will be any changes. He added: "The government has said in several occasions that it won't be making changes in this regard."
Baroness Ros Altmann, former pensions minister, believes "that the government has wronged these women and did not give them fair notice, or a fair chance to make properly informed plans for their retirement".
Nevertheless, she struggles to see the government accepting the APPG proposals, she told FTAdviser.
She said: "I do think they should be addressing this issue rather than trying to deny any responsibility.
"I would like to see pension credit extended to the old 1995 Act timetable for both men and women, to help those in hardship. But unless a court case succeeds and/or the Parliamentary Ombudsman finds against the government on maladministration of the information duty to these women, I fear they may remain disappointed."
Waspi was the subject of a recent debate in December in the House of Commons, with minister for pensions and financial inclusion, Guy Opperman, saying that providing full transitional state pension arrangements to women born in the 1950s would potentially increase inequality.
The APPG had previously tabled the private member’s Bill to be discussed in Parliament today, but Conservative MP Tim Loughton, co-chair of the group, decided to pull it out due to six other documents being discussed on the day.
maria.espadinha@ft.com
