Government urged to tackle reforms
Altmann quits – attacks changes to women’s pensions
Lady Altmann attacked “short term political considerations”, saying they have got in the way of “good policy making”.
Her departure was accompanied by Anna Soubry, business minister, and Ed Vaizey, culture minister.
Lady Altmann, who has been replaced by Richard Harrington, said women had not been properly informed about extending the pension age for women to 66 and the government had failed to deal with the hardships caused.
In her resignation letter to Prime Minister Theresa May, LadyAltmann stated that: “Unfortunately over the past year, short-term political considerations, exacerbated by the EU referendum, have inhibited good policymaking.
“As the country heads into uncharted waters, I would urge you and your new team to enable my successor to address some of the major policy reforms that are needed to improve pensions for the future.”
Lady Altmann said that it is “vital” to continue to roll out auto-enrolment and that the government should look to develop a “one nation” pension.
This would include a “long overdue reform” of pensions tax relief, which would have flat-rate tax relief more generous than the current basic-rate tax relief, and withdrawals taxed in later life as a behavioural incentive not to spend retirement savings too soon.
She called for a major review of defined benefit (final salary) pension scheme funding and said affordability is urgently needed to ensure there were adequate resources for younger generations’ pensions. She said the government should also consider the potential use of pension assets to boost economic growth.
Regarding women affected by the increase to state pension age she said: “I am not convinced the government adequately addressed the hardship facing women who have had their state pension age increased at relatively short notice.”
The government extended the women’s state pension age from 60 to 65 in legislation first introduced in 1995, and later to 66, but women have complained in their thousands that they were not sufficiently informed in order to make preparations.
Some claim they have lost out on £40,000 and that the government is guilty of a breach of contract after they paid their contributions during their working lives.
Lady Altmann, who was appointed Pensions Minister in May 2015, had promised to act on behalf of the women affected, but she later admitted that there was little likelihood of persuading the government to amend the legislation.
More than 200 women across the UK have written to Daily Business to air their grievances.
Penny Mordaunt, the former Minister for Armed Forces, becomes minister of state at Work and Pensions.