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 Joan Found (not verified)

New state pension

I agree- this point seems to be not well known, the full state pension always mentioned is any contributions made to April 2016, when New state pension came in. If I don’t work or pay National Insurance contributions right up to my 66th birthday I will not receive the much heralded state pension of about £168 ( before 2020 increase)... I think this has been ignored in a lot of cases.

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!

In reply to by Catherine West (not verified)

DWP

I was born 1956 worked all my life I didn't receive any letters either I'm 63and half now suffering with arthritis I don't work but got a bit of pension from a job were I worked got to make it last until I'm 66

In reply to by Catherine West (not verified)

DWP

I never got a letter either I was born 1956 I'm 64 now had to leave my manual work because I've got austurious arthritis bad in my knees ankles hands had to dip into my private pension because I cant get any benefits so were the justice for us

In reply to by Catherine West (not verified)

Suggest you divorce him and…

Suggest you divorce him and live together. Can they stop you having your pension at 66 then?

In reply to by Catherine West (not verified)

Suggest you divorce him and…

Suggest you divorce him and live together. Can they stop you having your pension at 66 then?

In reply to by Catherine West (not verified)

Same Boat

I feel for you very much and feel the same ... tired ... dealing with the guilt that my Mother is in a home & I am not able to help with my young grandchildren. We are just being taken advantage of by people who will have no problem receiving huge pensions but yes their pensions have to come from somewhere. It is disgusting. Take Care. I wish you and your husband well

In reply to by dawnjakins (not verified)

Pension

I am in exactly the same position as you. I worked all my life as a nursing sister full time as well as raising 3 children. My husband and I are now living off our savings just to keep our heads above water. I wonder if our esteemed politicians would do the same. After 40 years of heavy nursing and life and death situations I'm in very poor health and çant work as a result. It is a miserable retirement not comfortable and enjoyable as it should be. This is all so unfair especially when I too was never officially informed. I only found out when I went to claim my pension at 60.

In reply to by Catherine West (not verified)

Pension

I think you are incorrect. You will get your pension age 66 in 2021 if, like me, you were born in 1955. I think you are getting muddled up with pension credit which has been changed to both partners being in receipt of pension.

In reply to by Catherine West (not verified)

Pension date

My husband is 3 years younger than me. I will get my pension at 66 when he will be 63. Why are you not entitled in your own right to get yours at 66. I have never heard that I would have to wait until my husband has reached state pension age before I can get mine. Why do you have to wait ?

In reply to by Catherine West (not verified)

Pension

Why do you have to wait. Til your hubby gets his? It's your pension? My hubby is 11 ys younger than me. But I get mine on 19 Sept 2021 born 1955 too. So you should get yours. You maybe getting mixed up with pension credit..... We can't have that til our men retire whi h is not right,

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.

Pension

I did not object to few years to be added on to the pension age. However to up it by six years in one go is totally unfair.

Wasps

WHY IS IT THAT WOMAN ARE ASKED SURLY ITS FARE TO HAVE MEN AND WOMEN S TO RETIRE AT THE SAME AGE
HOWEVER WOMEN BORN IN THE 50S DIDNT HAVE THE SAME RATES OF PAY AS MEN OR THE SAME OPPERTUNITIES IF FACT WOMEN WERE ENCOURAGED TO TAKE PART TIME WORK AND PAY LESS NINO talk about double standard in fairness and although there is no law governing fairness what about a duty of care it's a disgrace the way the women of Britain born in 50s have been treat and ridiculed by the government
Women told stop mourning when lives have been wreck ed due to cost cutting exercise no thought or concession given to these woman
Shame on you that as been allowed to happen

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