Guy Opperman, Parliamentary Under Secretary of State for Pensions and Financial Inclusion, has today announced that there would be no move to alter or soften the increases to women’s state pension age.
This comes following an Opposition Day debate, where members behind the campaign Women Against State Pension Inequality (WASPI) were calling for compensation those born on or after April 1950, who claim they have lost out on around £45,000 because of increases to the state pension age.
WASPI claims that some women born in the 1950s have been hit particularly hard by these changes, and that the changes to their state pension have been imposed with a lack of notice.
Why has the government made this decision?
Part of the reason for the state pension age increase is to keep in line with the increase in life expectancy. Opperman stated that if women’s state pension age remained at 60-years-old, they would be spending 40% of their lives on the state pension.
‘This situation is not sustainable for any government, and would mean increasing taxes for the working population,’ he said.
Opperman also asserted that reverting to an state pension age of 60 would cost the UK economy £70bn.
He stated that ‘any further transitional arrangement would come at great cost, and all substantial proposals would be wrought with legal problems, as well as financial ones.’
In response to the call for a compensation package for women who have been most affected by the state pension age changes, Opperman says: ‘This would [actually] cost the taxpayer over £30bn, and potentially even more.’
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What have the changes been up to this point?
The Pensions Act 1995 put in place that the state pension age for women would increase from 60 to 65 over the period from April 2010 to 2020.
This decision was taken to address a ‘long-standing inequality’ between men and women’s state pension age.
However, the Pensions Act 2011 sped up this change, meaning that women’s state pension age would increase from 63 in 2016 to 65 – in line with men’s state pension age – in November 2018.
The act also stated that both men and women’s state pension age should increase to 66 by 2020.
This means that women born in the 1950s have seen their pension age increase by six years over a 10 year period; so, a women who was born in 1956 would have been expecting to be able to retire when she reached 60-years-old in 2016 will have had her working life extended by the full six years, when her peers born just a few years earlier won’t.
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What will happen to the state pension in future?
Men and women’s state pension age are set to increase further by equal amounts.
Following the Cridland Review in 2017, the government has outlined plans for the state pension age to increase to 68 between 2037 and 2039.
You can use our state pension calculator below to find out when you will be eligible to claim.
- Find out more: How do I qualify for state pension?