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

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.

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.”

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.”

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.”

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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.”

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

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?

DWP

Your right they have stolen our pension money I'm 63 and half now taken early retirement from a works pension were I worked I,'m single so I have to make it last I have bad arthritis aswel

In reply to by ALISON PEEL (not verified)

Pension

I think when you work all your life. You should be able to stop work at 60. And get one that doesn't work get them out to work we have pay are tax andins

In reply to by Tracy (not verified)

State pensions

I agree why is it only those born in the 50s who will be compensated I was born in 1961 worked all my life expecting to retire at 60

In reply to by Violet Purdon (not verified)

Pension Acceleration

Totally agree with Violet. It was the 2011 acceleration that was very much out of order. For a start, it was less than 10 years out from retirement which was against EU guidelines so really what was the point of being in the EU when it comes to protecting the working population. And Baroness Altman was just put in as a Patsy to make it look above board as she was a woman. Also we were paying in at a greater rate to fit a supposed earlier retirement

In reply to by ALISON PEEL (not verified)

Pensions being raised

I was never told about the pension being raised, I am nearly 64 and struggling to keep working being diagnosed with an ongoing illness I also have to struggle with ageism it isnot

In reply to by ALISON PEEL (not verified)

Pension

I turned 60 in december last year and like many woman who have their parents still here I also work around them. My mother is in hospital at the moment so I have to look after my father as they are both in I'll health so I work part time and I'm adding up the money I am losing from work . There is going to have to be something sorted out cos there is more parents living longer which I'm pleased it's just who looks after us. If the pension age for woman was 60 we would no there was some money coming In each week.

In reply to by Tracy (not verified)

State pension delay

I agree women born in early 60s affected too.ive already been working 40years paid my nat insurance all that time but now have to wait till I'm 67to get my state pension it's very unfair and too long.even 65 would be better but 67 is a bit too long.

In reply to by Tracy (not verified)

Pension

I was born February 1961, I will also have to wait for my pension, I don't see anyone fighting our corner being just one year off the Waspi women, we also need our pensions !!!!

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 Paul (not verified)

Waspi ladies.

I agree with Paul. These ladies had 25 years to prepare for retirement. Valdi was 24 when the change was announced. She probably had no plans for retirement then so why start moaning now.? What is more disgraceful is the £40 a week the older pensioners are paid less than the younger pensioners. Work for 60 years and paid the lowest state pension, work half your life on benefits and then receive the highest state pension. Broken Britain.

In reply to by Paul (not verified)

1950’s Women

Paul regardless of how much money some of these women have they paid into their pension & have a right to it as does everyone else regardless of being a millionaire or not. If we stick to your ruling MP’s etc should not get their very generous pensions then as many are very rich. Or is it a case one rule for them & another for everybody else. Those women worked hard all their lives no help with children so did part time work. No equal pay still not. The bbc as I speak just lost a case. Have some respect.

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