The cost of changing women's state pension age: have women born in the 1950s been short-changed?

20 February 2019
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In 1995, the government announced plans to increase women’s state pension age from 60 to 65 in line with men’s. As a result, many women in their early 60s now are facing financial hardship. We hear from the campaigners seeking redress

Have you been affected by the state pension age changes for women? We'd like to hear your story. Please email editorial@moneywise.co.uk

Valda Marks, 64, was devastated when she discovered the state pension age had risen.

Just before her 60th birthday, she asked for a state pension forecast but, to her horror, found out she would have to wait another five years before she could claim.

“I felt absolutely robbed when I found out about the age change. I was looking forward to a comfortable retirement, but when you find out you are not getting a pension it can be quite difficult,” Valda says.

Valda, who lives with her husband in Suffolk, says the decision to raise the state pension age has cost her £44,000 and that, as a result, they have had to sell their home and rent.

“Our house is now our pension fund. We could have stayed but we would have had very little income. Without selling it, we would have found it more difficult but we should not have had to do it.”

After leaving school, Valda started working in the unemployment benefit office and then became a self-employed bookkeeper.

“I felt robbed when I found out about the age change”

She adds: “After I turned 60, I had to carry on working because of the pension changes but, last year, I had to go down to two days a week for health reasons. I work part-time as a bookkeeper, but this will be ending soon and I will have to look for a new job, which will be a worry.”

Like millions of women in their early 60s, Valda has had her dreams of a relaxing retirement crushed by the government.

Having experienced a lifetime of inequality, women entering retirement are finding they are even getting a raw deal when it comes to pensions. Changes to the state pension have left millions of women born in the 1950s poorer, with many now having to wait up to a further six years before they can claim.

Some, who have worked for decades and were expecting to retire have found they are now years away from receiving a state pension.

Many of these women are also unable to work because of poor health. Some are having to claim universal credit and have been forced to use food banks, while others, like Valda, have even had to sell their homes.

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Valda Marks

Valda Marks (above) says the decision to raise the state pension age has cost her £44,000 – and her home

Changes to state pension age

The Pensions Act 1995 increased the state pension age for women, bringing the qualifying age in line with men by 2020.

The government then decided to accelerate its plan to increase the state pension age in 2011, so that men and women were on an equal footing by 2018. Women who thought they would receive a state pension at 60 suddenly found out they would not get it until they were 66.

The state pension age for women was raised last November to 65 – the same as men – for the first time.

It has been steadily rising from 60 since 2011 and in 2020 the age for both sexes will rise to 66.

This means that 3.8 million women born in the 1950s (on or after 6 April 1951) who thought they would be able to retire at 60 have had to wait another five or six years.

However, the increase in the state pension age has drawn widespread criticism.

Campaign groups such as BackTo60 and Women Against State Pension Inequality (Waspi) argue that many women born in the 1950s were not warned of the changes and have suffered financial hardship as a result.

While the government insists it did enough to notify affected women of the changes, many disagree.

Debbie de Spon, a spokesperson for Waspi, says: “Women who have worked hard all their lives and thought they would be retiring at 60 are suddenly finding out they can’t work and are having to live off the money they saved for retirement.”

Ms de Spon says that some women who stop work can struggle to return to the workplace.

She says: “Many women often give up work to look after elderly parents or sick partners and then find they have to return to work to finance themselves. Entry back into work for women in their late 50s and early 60s is not easy. Despite legislation, older women still face discrimination in the workplace.”

Have women born in the 1950s been short-changed?

Fighting back

While the increase in women’s state pension age has been debated in parliament on a number of occasions, the government has refused to budge.

Last year, work and pensions secretary Amber Rudd said the government would make “no further changes to the law on this issue”.

However, women hit by the changes to the state pension age are refusing to be silent on the issue and are fighting back.

Waspi was set up in 2015 to campaign for compensation for women affected by the state pension age change.

Since its launch, thousands of women have taken part in rallies across the country and last year they marched at Westminster.

While Waspi agrees with equalisation of the state pension age with men, it is unhappy with the way it has been implemented.

The group is calling for a bridging pension to help women born in the 1950s, with compensation for those women who have reached state pension age and lost out.

Ms de Spon says: “Equalising the state pension age does not give women born in the 1950s equality. The government needs to do more. There are women claiming benefits each week when they thought they were going to be on the state pension. There needs to be some kind of compensation for all women who were not given adequate notice and time to make new arrangements.”

“Women who have worked hard all their lives and thought they would retire at 60 are suddenly finding they have to live off their retirement savings”

The decision to raise the state pension is now set to be fought in the High Court.

BackTo60, which claims to have 738,000 supporters, has won the right to judicial review to determine whether recent increases to women’s state pension age were lawful.

This case will be heard this summer, and the campaign group is hoping the government will reverse its decision.

The group is calling for the state pension age to be kept at 60 for women born in the 1950s, but the government has ruled out this idea as it would cost more than £70 billion.

Patrick Connolly, a chartered financial planner at Chase de Vere, says: “Based on everything the government has said so far, it seems unlikely that it will revise its plans for the state pension age, although it would be good to see the government making some steps to help those people who need it most.”

Valda is equally pessimistic.

She says: “I would like to see my pension backdated, but it is not going to happen. The government can’t afford to do it for all of us as the money isn’t there.

“I wouldn’t have minded if it had phased in fairly, but I had no notice whatsoever. The government made a mistake and we should be compensated.”

Have you been affected by the state pension age changes for women? We'd like to hear your story. Please email editorial@moneywise.co.uk

Members of Waspi (Women Against State Pension Inequality) protest outside parliament

Members of Waspi (Women Against State Pension Inequality) protest outside parliament

Why is there a pension gender gap?

Millions of women experience a gender pension gap and face poverty in retirement because of low pay and taking career breaks to raise children.

A recent report from Fidelity International suggests a 25- to 34-year-old woman’s pension would be worth £126,784 at the state pension age of 68, compared to £142,836 for men – a gender pension gap of over 10%.

One of the main reasons why women face a pension shortfall is that men earn, on average, more than women during their careers, so they contribute more to their pension.

To qualify for the full state pension you need a total of 35 qualifying years of national insurance contributions or credits (NICs).

However, as women take time out from work to raise children or become carers, they are more likely to have gaps in their NICs. Taking time out means women have lower lifetime earnings and end up with smaller workplace pensions.

Women who work part-time are also being penalised. If they earn below £6,032, they will not receive NICs for their state pension.

The Trades Union Congress (TUC) estimates that as many as three million part-time women workers are excluded from workplace pensions because they do not meet the minimum earning criteria.

Employers must enrol staff earning above £10,000 into a pension as part of auto-enrolment rules. However, as many women work part-time and do not earn this much, they don’t qualify for automatic pension contributions.

Divorced women can also miss out on pension money. During a divorce, pension assets often get left out of settlements, leaving women worse off in later life.

Mr Connolly says the best approach to retirement is to start saving early.

“While part-time workers may not earn enough for auto-enrolment, that does not mean they can’t have a pension. Their employer can still pay into a pension for them.

“Maternity rules have also improved over time. so women who have children can still pay in, although you need the finances to do this.”

Mr Connolly adds: “While women are still getting short-changed in many cases, we do now have a culture where many doing the same careers as men and are getting better opportunities, so over time you would expect the gap to close.”

 

In reply to by Davina Everett (not verified)

For goodness sake grow up.

In reply to by anonymous_stub (not verified)

Without my rightful pension I have no independence, denied a bus pass so can't get around easily and don't have my independence. I ve had to break into small savings to help and have no independence as far as finance is concerned having to rely on my husband for ' Spends so very degrading. Also , I can't help the economy and as I have recently had a heart attack the stress has been phenomenal.. all my close friends and my family draw their pensions even though they are only 18 months older than me.Women punished and denied yet again!! Just so immoral to all us 1950 s women who ve contributed so much. Something must be done. It s our rights and OUR. Money. Hard earned money at that.. we need action and NOW!!!!!!

In reply to by Christine Jones (not verified)

You ask about equality and compare yourself to your husband. He is older than you and retired at the correct age at that time. A woman born the same day as he would have retired that day. By the same token a man born the same day as you wily retire the same day. That is indeed is equality.You ask of human rights. What is wrong men are human as well remember. Men and women should retire at the same age.There is no punishment being dealt out, the is no injustice. Your SP is based on the same criteria as a man and that is surely only right.Finally we are living longer.

In reply to by ALISON PEEL (not verified)

Government stealing women’s pensions

I was furious to find that the Government had stolen the pensions of women born in the 1950’s and yes ‘stealing’ is the only word to describe it.
They can colour it however they like but you can’t get away from the fact... that we are on the the victim’s end of a theft!
So do we stand any chance of bringing the perpetrators to justice?

In reply to by anonymous_stub (not verified)

I am male and over 70 so the new pension changes didn't effect me, but I used to work with many female colleagues in the NHS who were effected. If you read the majority of advice regarding pensions there are two main messages 1) start building up your pension pot early and 2) Find out what your pension will provide early on.What the government did is change the rules at a very late stage and therefore there was very little that anyone could do to mitigate the changes, in my opinion there should have been a much more gradual introduction. I was disgusted to find out that the governments way to deal with pensions was to take all the contributions they receive as income and just pay out what they needed each Year. I would have thought that it was pretty obvious that when the post war population boom hit pension age this approach just wouldn't work. They should have realised this in the 50's and 60's.

In reply to by ALISON PEEL (not verified)

Maybe you should explain how this would be funded, I would suggest making basic income tax 40% like Harold Wilson (Labour) did in the 60's and only those who have fully contributed should get full pension only for each full years credits. Stop Guaranteed Pension Credits and let those who never paid enough in live on nothing from the state. It is hurting women because they hate equality that works against them. Everyone should get a pension after 50 years full time working life and contributing for that period. As for manual workers I was one, at 15 I was expected to carry 16 stone on my back, the law limits it to under a quarter of that for modern workers so should not be as worn out as we were. Maybe we should end the entire social state and each person pay their own way or be left to die.

In reply to by Christopher Sinclair (not verified)

Well said Christopher. The politicians letting us down and turning a deaf ear. Very sad. Very annoying. And very topical!

In reply to by Paul (not verified)

Paul it gets even better. The lady in the article probably sold her house because she's never there. Singapore, NZ, UAE, Spain not forgetting winter in Cyprus. If she if struggling then I wouldn't mind a bit of it

In reply to by Christopher Sinclair (not verified)

Christopher you should have added 2007 Labour Prime minister. It was also Labour who took away the widows pension.

In reply to by Christopher Sinclair (not verified)

And as for the Labour Party or even Liberals?Umm well labour was in power for many years did they change anything? Yes they did they started the rise to 66 .The liberals? Well they were part of the coalition with regards to 2011.All the major parties knew and agreed that women’s SPA had to rise for equality and financial reasons.

In reply to by Margie Allday (not verified)

State pension is paid without any tax deduction BUT it counts towards your taxable income. It has always been like that.Call yourself lucky if your total taxable income is above the personal tax allowance, as millions of pensioners don't have an income higher than the personal allowance.

In reply to by Joan Found (not verified)

Joan you say you have 43 qualifying years but if that was the case then you could not improve your state pension and you would have no need to pay more NIC s unless you were earning over the threshold. If you have been told you don't yet have enough contributions for a full pension then you have probably been contracted out at some stage. I have 41 years of contributions but I was contracted out for 10 so I actually only have 31 qualifying years. I could carry on paying or I can accept a lower pension when I receive it in 2020.

In reply to by dawnjakins (not verified)

Dawn - Have you tried claiming a category B state pension based upon your husband's NICs?

In reply to by peter sheppard (not verified)

I am so sorry to read this, Peter. My condolences to you and your wife. Sadly, many women suffer from ill health, especially after age 50 which was surely why 60 was a sensible age for that generation that worked from their teens to retire.More to the point, it was a social contract that was broken without due care or consultation. Now The Treasury is plundering the NI Fund to spend on vanity projects that help the private sector corporations more than British citizens.

In reply to by Catherine West (not verified)

You misunderstand. You will be entitled to your SP once you reach your SPA. This is unconditional.What you won’the entitled for until your husband also reaches his SPA is any Pension Credit. This is a means-tested benefit. Do you expect to qualify forit?

In reply to by Catherine West (not verified)

It's not your pension you can't get until your husband reaches SPA, it's just that you can't claim pension credit, you'll still get your SP, at state pension age!

Womens state pension age

I totally agree with what all the groups have to say about the age increase, and I am behind them in every way, and I thank the team helping us women fight for what is owed to us. I retire next year in September I will be 66, i have been trying to help out with grandchild, and my husband is in bad health, I wish I could have retired when I was 60 it would have helped so much, as working and looking after others soon takes its toll. The thing is, I'm nearly ready for retirement and will have worked 51 years of my life, so I would find it very unfair to get the old lower rate of state pension rather than the new higher rate, if we go back to 60, does anyone know how this will work out for women like me? Iv struggled for almost five years as it is, and to only end up with a little over £100 a week would be devastating. If we got compensated is it taxed? I'm sure it will be, so in the long run does it pay us to accept the compensation or not if we dont get the full new state pension rate.

Womens state pension increase

I wrote a letter to David Cameron while he was PM, about how I felt regarding the government stealing my state pension from me, it was theft, no other name for it. He said openly that what Gary Barlow And Jimmy Carr did regarding their taxes was immoral, but I Informed him what the government did to womens state pension age increase was immoral, so he cannot throw stones at someone else and accuse them of doing wrong, what they did with their taxes wasn't illegal just immoral he said, I think the PM was just sorry their money wasn't going in his direction. I got a reply from his secretary a few weeks later saying they forwarded my letter to the DWP, and Mr Cameron would like to thank me for taking the time to write to him, honestly what a joke!!!!!

Inequality All Round - WASP only care for themselves

Neither men not women are any healthier after the age of 60. Men are caught in this trap too. The age 60 safety net of pension credit has gone and more couples are having to sell their homes to use for rent to live on then if they are lucky enough to be pretty much clapped out with a disabilty may be given a one room suffocating sheltered housing box to live in.
I am cross that WASP seem only concerned with themselves rather than women too sick to work but fit enough for this govrnment being forced on the streets, They are not concerned with those that were forced to cash in private pensions. i know pwople that were advised to cash in their serps leaving their pensions short of the actual amount but treated as though they receive it.
Then there are those pre 2016 that received the basic pension and private pensions were not added to the final amount but used to reduce this amount. Post 2016 the pension is raised to this final amount and private pensions are added on top.
How is any of this fair?
How is it that a 64 year old man can receive disaility benefits supposedly enabling him to travel to work doing a heavy job, with no more reassessments after 66, but if you are 66 you cannot claim any disabilty benefits unless you are bedridden and unable to move nor feed yourself. So, if you have a disabilty that prevents you from driving or walking too far your pension is spent on taxis to visit a doctor and many cancel hospital appointments because they are no longer entitled to volunteer transport.
Nothing makes sense.

Tory assumptions about pensioners

I have a letter here from my Tory MP.
She talks about pensioners and sates she included those aged 55 and over because, according to her, MOST people retire at age 55.
Most people she tends to mix with I assume.

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