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Government pressed for change

MPs demand early pension payments to women

Frank FieldWomen who were given short notice – or no notice – of the change to their state pension age should be given the option to retire earlier with a slightly reduced payout, says a new report.

As reported by Daily Business on Thursday, MPs on the Work and Pensions committee have today issued a report saying more “could and should have been done” to inform women nearing retirement that their eligibility for the state pension was being pushed back from 60 to 66.

An inquiry into the issue heard of “alleged failures and shortcomings in the communication of those changes, and the impact both of this and of later access to pensions, especially on women born in the 1950s.”

The MPs, who include SNP member Mhairi Black, recommend that the government permits women in the specified age group to take a state pension sooner than scheduled in return for lower weekly payments for the duration of their retirements.

The changes were legislated for in 1995 and 2011.

Committee chairman Frank Field said: “This interim report opens up the debate which I’m sure MPs from all sides will want to pursue. We will begin taking fuller evidence on the options as soon as possible.”

Committee member John Glen said: “Lack of adequate notification of state pension age changes demands transitional arrangements, but implemented in an affordable way. This report recommends a possible way forward which the government should now explore.”

The Committee will be taking further evidence, including a submission from the Government Actuary, and seeking a debate to explore the options further.

Womens SPA rag out
Our story from Thursday


Having been left untouched for 70 years, state pension age has been changed by successive governments to take account of rising longevity, gender equality and the rising impact of pension bills on government finances. The changes currently occurring were legislated for in 1995 and 2011.

This Report considers alleged failures and shortcomings in the communication of those changes, and the impact both of this and of later access to pensions, especially on women born in the 1950s.

Our primary recommendation is about communication. Although there may always be communication issues between government and citizens when laws change, more could and should have been done, especially between 1995 and 2009. Noting the Government has launched a new independent review to consider in 2017 the state pension age beyond 2028, we highlight suggestions on what should be done in the future. It is critical that people affected by any future changes in the state pension age are fully and properly informed.

Our inquiry was not set up to take evidence or address options for ameliorating the impact on those worst affected by the 1995 and 2011 changes. However, we took evidence from WASPI and several debates in the House have highlighted potential options for addressing the issue, should the Government choose to do so.

Some of those options, for example re-calculating all women’s pensions for those born in the 1950s as if they had been born before 1950, would be prohibitively expensive and could have damaging wider consequences. 

We were, however, interested in an idea that was proposed of permitting early retirement, from a specified age and for a defined cohort of women, on an actuarially neutral basis. This arrangement, which features in some defined benefit occupational pension schemes, would permit women in that specified age group to choose to take a state pension sooner than scheduled in return for lower weekly payments for the duration of their retirements. The actuarial reduction factor used should ensure that, on average, over the lifetime of the pensioners concerned, there would be no additional pension costs to the exchequer.

There are several questions which would need to be addressed before such an idea could be progressed. The details and limits of eligibility, and the rationale for this relative to those earlier or later, would need to be determined, including the position of men at 65. It would bring forward some public spending, as an unknown number of women would take their state pension early. This would increase public sector net borrowing in the short term in return for a longer term reduction. The total fiscal impact would not be known until all the relevant pensions ceased to be paid.

This factor, added to the unknown take-up rate, would add to budgeting uncertainty. The scheme would also need to be properly administered, which has cost implications. Any changes would need to be assessed for their wider impact on tax and benefits. It may be that any increased costs to the public purse could be incorporated in the factors used to reduce weekly pensions to make the policy more likely to be fiscally neutral in the long term. 

As this was not the focus of our inquiry the committee has not taken much evidence on this idea. We intend to in the coming weeks. It is, however, an interesting option and one the Government should explore.

Committee Membership:

Frank Field (Labour, Birkenhead) (Chair); Heidi Allen (Conservative, South Cambridgeshire); Mhairi Black (Scottish National Party, Paisley and Renfrewshire South); Ms Karen Buck, (Labour, Westminster North); Neil Coyle (Labour, (Bermondsey & Old Southwark); John Glen (Conservative, Salisbury); Richard Graham (Conservative, Gloucester); Mackinlay (Conservative, South Thanet); Steve McCabe (Labour, Birmingham Selly Oak); Jeremy Quin (Conservative, Horsham); Craig Williams (Conservative, Cardiff North).

> Comment: Time for a rethink

2 Comments to MPs demand early pension payments to women

  1. my husband worked 41 years before he died, and I worked 32 I gave up my job to look after him. Since his death I have been harassed to get a job I am on jsa. I am 62 why can’t I claim my pension on 73 years worth of national insurance contributions?

  2. I am a 62 year old woman and I would like my full state pension now, not a reduced one. This is what we are fighting for. If they can pay a reduced one then they can pay us what we are entitled to: a FULL STATE PENSION

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