Women's state pension age increases have left thousands in poverty: financial futures

Women's state pension age was moved to age 60 in 1940, and it remained in place 70 years, only starting to move upwards towards age 65 in 2010.

The 1995 Pensions Act made that change among other initiatives, and it is fair to say it didn't really hit the news at the time. The trade press covered it and there were a few column inches in the business section of the daily newspapers.

So as long ago as 1995, women aged 40 and below might have realised that one of the longest-standing aspects of the retirement system, their pension age, had been changed.

Read more: What the state pension changes mean for older women

INFORMING THOSE AFFECTED

The rise was phased in gradually, so that women born before April 1950 still retired at 60 and only women born after April 1955 retired at 65. But how were they to know?

In 2001, the government changed its computer systems so that when people asked for a state pension statement, it would contain - somewhere in the text - the year their pension would start to be paid.

But it wasn't until 2009 that the government started to write to women affected by the change announced in 1995. Women born between 6 April 1950 and 6 April 1953 received letters between April 2009 and March 2011.

Read more: Rise in state pension age - women feeling the pinch

Women were therefore being told just before age 58 that their state pension was to be paid from age 63, not age 60: just over two years' notice of a reduction in income of around £18,000 (based on state pension of roughly £6,000 a year).

Worse was to come, though, as in 2011 the government extended state pension age even further for women born after April 1953. The government proposals added up to two years' additional delay before certain women received their state pension.

There was much opposition from charities, unions and the Labour Party, all concerned that these women were being given just five years' notice of a further two-year increase in state pension age, which would cost them around £12,000.

In the face of this opposition, the government amended the plans so that the maximum extension any woman faced on top of the 1995 Act changes was 18 months.

The Department for Work and Pensions (DWP) knew, however, that it had not contacted any women affected by the 2011 Act (those born after April 1953) about the changes that had already occurred in the 1995 Act. Large numbers of women therefore still thought their pension age was 60: why wouldn't they?

DEVASTATING BLOW

After the 2011 Act, DWP wrote to these women between January 2012 and November 2013 to inform them of the change.

Women aged 58, thinking they were due to retire in two years' time, received the bombshell that they would have to wait six more years! Just two years' notice of a loss of £36,000, or as much as £48,000 for those on pension credit! A devastating blow to the finances of ordinary people.

Devastation and shock has now progressed to anger and a formal protest from women, under the acronym WASPI, with a petition calling for some help from government. Thousands of women have been left in abject poverty by these changes as a direct result of the government's failure to inform them.

When the 2011 Act was voted in, no opponents of the change realised that many women had never been told of the previous changes. The impartial briefing to members of the Houses of both Commons and Lords makes no mention of it.

Rachel Reeves MP, shadow Minister for Work and Pensions, focused on the five years' notice of a loss of two years' income or £12,000. She didn't refer to two years' notice of losing up to £48,000.

We cannot know what impact these facts would have had on the legislation passed in 2011, were they known and publicised. But we cannot simply ignore them now that we do. It was known that some women would face hardship, but the extent was grossly understated.

The government says there are no new arguments and refuses to consider any change. That is just semantics.

It knows, and we now know, that the decision was made on wholly misleading and incomplete data. Natural justice and decency requires that parliament looks again at this issue, despite the potential costs.

The petition can be accessed here.

Alan Higham is an independent pensions expert and founder of Pensionschamp, a website offering consumers help in their pension decisions.

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Comments

Women’s State Pension

I am one of the so called WASPI women, born in 1954, my pension is now due to be paid to me in September 2019, at age 65 years and 6 months. I am outraged and quite rightly so. This was a deliberate plot by successive governments to hide the facts by not informing women of the changes, not once, but twice. I read of women killing themselves, living in cars having had to sell their homes they have worked hard for all their lives. It is a national scandal and needs the mainstream media to stop hiding the facts as well.

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