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  • January 2015
01

MPs to debate impact of state pension age equalisation of women

Open-access content Tuesday 5th January 2016 — updated 5.50pm, Wednesday 29th April 2020

A parliamentary debate on the rise in the state pension age for women has been scheduled for 7 January after an online petition has secured more than 100,000 signatures.

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The petition calls for the UK government to make "fair transitional arrangements" for all women born on or after 6 April 1951, who have "unfairly borne the burden of the increase to the state pension age".

This follows on from the debate on 2 December and an inquiry launched by the Work and Pensions Committee concerning the government's communication strategies around the increase, and the impact this has on specific groups of people, in this particular case, women born between 1951 and 1953.

Under the Pensions Act 1995, state pension age for women was set to increase from 60 to 65 between the period of April 2010 to 2020 to equalise with men's. 

The Pensions Act 2011 laid out plans for women's state pension age to rise faster than originally planned, reaching 65 by November 2018. Between December 2018 and October 2020, the age to claim state pension for both genders will be increased to 66.

Hargreaves Lansdown argued that while some women had been given "adequate notice" for the change, those born in 1953 and 1954 would have to wait another 18 months to qualify for a state pension.

The campaign group Women Against State Pension Inequality are in agreement  with equalisation, but do not agree with the way changes were implemented, describing the move "with little/no personal notice", "faster than promised" and "no time to make alternative plans".

Tom McPhail, head of retirement policy at Hargreaves Lansdown, estimated that there were 360,000 women aged 61. If the government decided to change its plans and pay their state incomes, currently £117.45 a week on average, for an additional 12 months it would cost taxpayers £2.2bn. 

"Any concession by the government could quickly run into billions, which is why the government's current position continues to be that no further concessions will be made," he said.

McPhail also criticised the communication strategies conducted by the Department for Work and Pensions (DWP) around the change. 

"The DWP's communications around the state pension changes generally have been pretty poor, if they had got that right in the first place, we might not have this problem now."

The DWP's response to the petition is that the decision to increase women's state pension age was designed to remove the inequality between men and women. 

"The cost of prolonging this inequality would be several billions of pounds. Parliament extensively debated the issue and listened to all arguments both for and against the acceleration of the timetable to remove this inequality. The decision was approved by Parliament in 2011 and there is no new evidence to consider," it said.

This article appeared in our January 2015 issue of The Actuary.
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