Victoria Atkins MP responds to constituents concerned about changes to the State Pension age

 

Many constituents contacted me about changes to the State Pension age and how these changes have affected them. Given the importance of this issue, I would like to set out the background to these changes and my thoughts in detail.

 

I have read with care the correspondence from constituents on this issue, including the suggestion that transitional arrangements should be made. I also attended the debates in the House of Commons on 7th January and 24th February to listen to the arguments advanced.

 

The WASPI campaign has been conducted with passion and dignity. Starting with first principles, the campaign accepts that the State Pension age must be equalised. In addition to the principle of social equality, there is a legal obligation to do this: the UK has to meet its obligations under EU law to eliminate gender inequalities in social security provision.

 

As long ago as 1995, the then-Government legislated for this to be done gradually after 2010. In 2011, following sharp increases in life expectancy projections, the Government had to accelerate this process slightly to secure the sustainability of the pensions system.

 

Many women were affected by the proposed changes in 2011 and, when concerns were raised, the Government did what it could to mitigate the impact. As a result, the maximum increase was capped at 18 months relative to the 1995 timetable. That represented a £1.1 billion concession, helping women affected with the transition to a higher State Pension age.

 

This was in addition to significant improvements to the State Pension as a whole, including a 'triple lock' to the Basic State Pension and maintaining universal benefits such as the Winter Fuel Payment. The Basic State Pension 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'.

 

Importantly, all women affected by the 2011 State Pension age changes will receive this new pension, which is much fairer to women than the current system and will mean 650,000 women will receive an average of £415 per year more in the first 10 years. For the first time, women who have spent years out of the workplace because of caring responsibilities will find those years reflected in contributions to National Insurance which will count towards their pension.

 

The WASPI campaign asks for transitional arrangements to mitigate the changes further. The House of Commons committee that scrutinises the work of the Department for Work and Pensions (the Work and Pensions Select Committee) examined this proposal. It heard evidence that the potential cost of transitional savings would be c.£39 billion and that the potential cost of reversing the policy would be c.£77 billion by 2020.

 

These are enormous sums of money. To put these figures in context, each year our country spends £142 billion on the NHS, £71 billion on schools and £42 billion on defence.

 

I appreciate that the national budget feels a very long way away when trying to make ends meet at home. I must remember, however, that the Government was elected on the election promise of cutting the deficit. It has to make tough decisions about how to balance our national budget. Higher life expectancy is a significant factor in such decisions. It means that we will all have to adjust to longer working lives - particularly younger generations.

 

Some women state that they were not notified of these changes in enough time to change their financial plans. The Department for Work and Pensions states that all women affected by the 1995 changes were contacted between April 2009 and March 2011, and that all women affected by the 2011 changes were written to between January 2012 and November 2013. In any event, lessons need to be learnt by the DWP as many women have cited lack of notice as a cause of their problems. 

 

I hope it is clear that I have great sympathy for women affected by these changes, having read the compelling personal circumstances of constituents who have written to me and having listened to the arguments in debate. In the current economic circumstances, however, no one has been able to answer the question of how the country can afford to mitigate these pension changes to the tune of £39 billion. I cannot support transitional arrangements which are not costed. Should more affordable mitigations be suggested, I, of course, will review them.

 

I regret that I cannot provide better news but I hope those affected feel able to contact me in the future with this or any other concerns.