Editor's Comment: new twist in women's battle over state pension age hikes

Waspi sister group BackTo60 has won a judicial review to establish whether the recent rises to women's state pension age are lawful.

If you’re in your early 60s and looking forward to retirement, the past couple of months have hardly been a time for celebration of the approach of your golden years – indeed, quite the opposite. On 6 November 2018, the state pension age (SPA) for men and women was briefly equalised as women’s SPA rose to 65. It’s the latest hike in a series of adjustments that started in 2010 and were accelerated in 2011, designed to bring men and women into line in state pension terms.

Then, just a month later, men’s state pension age started rising for the first time in the 70-year history of the modern system, from 65 to 66. The changes are being introduced incrementally (as they are for women), depending on date of birth, so some men about to turn 65 will have to wait just three months extra to claim their state pension; but those born after 6 October 1954 will have to wait a whole year longer,  until their 66th birthday.

Women will be fully in line with men on a SPA of 66 by 2020, but the process won’t stop there. On the present legal timeline, we’ll be moving to a state pension age of 67 between 2026 and 2028, and 68 by 2046, though the government has already announced plans to bring the latter move forward to the 2030s.

Question of fairness

This frantic tweaking of the SPA is of course a response to the fact that we’re all living much longer than we were when state pensions were introduced. In 1951, for instance, men could expect to live less than a year and a half after they put the presentation carriage clock on the mantelpiece, while women would soldier on to an average age of 71. These days men aged 65 have another 18.5 years ahead of them on average, while women have almost 21.

No matter what you feel about the prospect of working longer or relying on your own pension provision in your 60s, the status quo is not sustainable as the population ages and the workforce (whose national insurance contributions fund the state pension for those already in retirement) declines. Moreover, in an age of nominal gender equality, it seems only fair that women should become eligible for a state pension at the same age as men.

Unfortunately, though, equality of state pension age does not equal equality of pension opportunity for men and women. There are numerous reasons why women tend to lose out in terms of both the state pension and occupational schemes – former pensions minister Ros Altmann has come up with 10. Arguably the most obvious ones are that women take much more time out of work to raise families (or care for elderly relatives); many more women then work part-time rather than full-time (figures from the Office for National Statistics show that 15 million men are in full-time employment, compared with nine million women, while six million women are part-time workers, against just over two million men); and they are more likely to be in lower-paid jobs.

Pension unfairness has been a particularly acute issue for a group of women born in the early 1950s, who have borne the brunt of a series of rapid SPA increases since 2011 to bring women into line with men. It’s a complex story, but the bottom line is that these women argue they were given little notice of both the SPA equalisation changes planned way back in 1995 and the 2011 plans to speed up the process.

Many more women than men rely solely on state payouts when they stop working, so many of this cohort are markedly worse off in their early 60s than they expected to be, and in some cases they may have nothing to live on until they finally start receiving state pension.

Money Observer has covered the campaign by Waspi (Women Against State Pension Increases) for compensation, online and in past issues, and the latest update is good news for their cause: Waspi sister group BackTo60 has won a judicial review to establish whether the recent increases to women’s SPA are lawful. The judicial review was sought on the grounds of “gross injustice” and discrimination, as successive governments failed to ensure women knew about the changes that would affect them so profoundly. The government claims that the compensation demanded would cost it £70 billion and is out of the question.

As yet, no date has been set for the next stage; but we’ll be watching with interest to see whether the court finds in favour of BackTo60, and how the government reacts in the event it loses. In an ideal world, it would acknowledge that it has caused these women a serious problem – and that this requires urgent attention.

moneyobserver.ed@moneyobserver.com

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