I fully appreciate the concerns of those who have contacted me about the equalisation of State Pensions. I recently both spoke to and wrote to the Minister for Pensions with the concerns of those who have contacted me. In her response Baroness Altman affirmed that the Government believes that people who have worked hard all their lives deserve security in their retirement and she highlighted the actions that have already been taken to ensure this. A 'triple lock' has been applied to the basic State Pension, which is now £1,100 per year higher than in 2010. For those reaching State Pension age after April 2016, a new State Pension is being introduced at a single, flat rate of £155.65, which will also be triple locked.
The Minister also wished to assure me that the Government was listening to the comments and concerns of those affected both locally and nationally. Already in 2011, action was taken to cap the maximum increase in pension age to 18 months relative to the 1995 timetable. That represented a £1.1 billion concession, helping those women affected with the transition to a higher State Pension age.
There is, though, a necessity to the reform of the State Pension system. With people living healthier, longer lives, the cost of the scheme to the Government has risen exponentially in recent years. Not to act and to ignore the pressure on our finances would have been irresponsible of the Coalition Government. Nine other European countries with older demographics have already acted, such as Germany, Denmark and the Netherlands, equalising their state pension age as far back as 2009.
European Union law also obliged that the United Kingdom, and all other member states, eliminate gender inequalities in social provision. The reform have achieved this. Before 2010, this was 41% of their adult life for women compared to 31% of men. Furthermore, on average, women reaching State Pension age after 2016 will receive more than women born before them. Over the next 40 years, women who receive State Pension can also expect to receive 10% more over their lifetime than men. It is clear that an equalisation of the State Pension age was necessary.
The Department for Work and Pensions (DWP) have been working tirelessly to ensure those who have been affected of the proposed changes would not be disproportionally were made aware impacted by the injection of impetus. By November 2013, the DWP had notified the relevant persons using the addresses registered with Her Majesty’s Revenue and Customs. This was after wider pension awareness campaigns were conducted, with information notices placed in national women’s magazines and newspapers for many years.
The Government acted retrospectively once more in 2014. After listening carefully to concerns, it sent out an additional 6,000 letters to women suggesting that they should find out about their State Pension and providing them with a phone number to call. However, only 79 of those contacted actually called for a statement. Additionally, throughout the whole process, the DWP has made all the relevant information on State Pension age available on Gov.uk.
All of these actions demonstrate that a great deal has been done to ensure that these affected by these necessary changes to State Pension are have been notified and I am pleased that the DWP listen and changes were made.
I firmly believe that all the actions that the Minister has highlighted demonstrate that the Government has done everything within its powers to notify those affected by this necessary change.
A change of attitude amongst employers toward older workers is also needed to make the Pension Act 1995 work. The Government has already engaged the employers and employer’s organisations in order to challenge the many outdated assumptions about the older worker. The Minister highlighted pleasing findings of independent analysis by the Institute for Fiscal Studies which showed us that the rise in women’s State Pension age has been accompanied by increased employment for women. I am pleased that after conversations with the Minister, there is an acceptance within Government that more must be done.
Please be assured that no one has seen or will see any reduction in their income as a result of the new measures; the changes have only postponed the date of eligibility. However, I will be sure to monitor the situation closely and will feed in any further concerns to Ministers where appropriate.