Pensions  

Labour challenges government on Waspi policy

Labour challenges government on Waspi policy

Labour's pensions spokesperson Alex Cunningham has challenged the government to allow women born in the 1950s to access their private or workplace pensions completely tax free.

The measure would address some of the grievances of the Women Against State Pension Inequality (Waspi) campaign, which represents women caught out by changes to the state pension age.

Many of these women, unaware that the eligibility age had changed, had expected to receive the state pension at age 60 and planned accordingly.

The discovery that they were not eligible until as late as 65 or 66 has left many women suffering financial hardship.

Despite the campaign's success in gaining public support and media coverage, the government has refused to give ground, after making one early concession on the timetable of the roll-out.

In parliament on 14 April, Mr Cunningham, MP for Stockton North, asked chancellor Philip Hammond "if he will extend pension freedoms to those women born in the 1950s affected by the change in the state pension age to allow them to access their entire private or occupational pension pots free of taxation".

In a written response on Monday (24 April), financial secretary to the Treasury Jane Ellison avoided answering the question, simply restating existing rules. 

"The pension freedoms are available to anyone aged at least 55 who wishes to access money purchase pension savings. This applies to occupational and private pensions alike and is irrespective of their state pension age," she said.

Under pension freedoms, people over-55 can take 25 per cent of their pension pot tax free. The rest is taxable at the marginal rate.

A Labour spokesperson told FTAdviser that Mr Cunningham's proposal was not official Labour policy, but was intended rather to "test" the government on its apparently rigid stance towards the Waspi women.

He said as yet Labour has made only one commitment to the Waspi women: to extend pension credit eligibility to women from age 60.

Pension credits are designed for low-income people who do not receive the full state pension. Eligibility only kicks in at state pension age, meaning women caught out by the change are currently ineligible.

The Labour spokesperson said the party was "looking at some other measures" to help the Waspi women, which it would announce in its election manifesto. 

The Scottish National Party also supports the Waspi cause. 

In September last year, the party published a 37-page report looking at five alternative courses of action to address the grievances of women affected by changes to the state pension age.

It proposed changing two pieces of legislation. The first, the 1995 Pensions Act, pushed women's retirement age from 60 to 66, while the second, the 2011 Pensions Act, accelerated the timetable by as much as 18 months. 

SNP MP Mhairi Black - who has been an active camaigner for the Waspi cause - focused on the second of the five alternatives, which would undo the 2011 Act, and return to the original 1995 timetable.