The angry WASPIs


Back in 1995, the UK government made what was widely regarded at the time as a sensible and long-overdue change to state pension legislation. Since World War II, women had retired five years earlier than men, a sop to compensate them for their inability to clock up pensions of the same size as their spouses - and incidentally to enable men and women to retire at approximately the same time, since it was assumed that most men were older than their wives. But by the mid-1990s far more women were working, married women's income was taxed separately from their husbands', many were paying NICs large enough to qualify for pensions the size of men's, and - most importantly of all - they were outliving men. Many people, both men and women, believed that the earlier retirement of women was an anomaly which desperately needed eradicating. I was one of those people: when the Pensions Act 1995 raised women's retirement age to 65, I was pleased - even though it meant that I personally would have to work for five more years.

The timetable for raising the retirement age was extraordinarily generous. The change would be phased in between 2010 and 2020. Women born before April 1950 would retire at 60, but women born between April 1950 and March 1955 would retire at some age between 60 and 65, the retirement age gradually rising until 2020. The first cohort to retire on their 65th birthday would be born in April 1955.

In 2010, the Government announced an intention to raise the retirement age for men and women from 65 to between 66 and 68 depending on their current age. Women born from April 1953 onwards therefore suffered a further rise in their retirement age. Older women were at this point unaffected. But that did not mean they would retire at 60. The majority of those born between April 1950 and March 1953 were already scheduled to retire later than 60 under the existing transitional arrangements.

But in 2011, that changed. The government, under pressure from the EU, decided to shorten the transition to harmonised retirement ages for men and women. The first cohort to retire at the harmonised age would do so in 2018, not 2020, and their retirement age would be 66 not 65.  This steepened the transition for all women born from 1951 onwards.

Robert Leach has some handy charts showing how both the original transition schedule and the 2011 change affected the various age cohorts. As can be seen from this chart, the original schedule affected ALL women born after April 1950. Only those born before April 1950 would retire on their 60th birthday, and women born after February 1951 would not retire at 60 at all:


The fact that the original 1995 transition schedule meant that the vast majority of women born after 1950 would retire later than 60 seems to have been lost on many of them. Even women born as late as 1959 seem to have expected to retire at 60. I will return to this shortly.

The 2011 change had no effect on women born before April 1953. But as the chart shows, women born from April -November 1953 suffered sharp increases in their retirement ages. A woman born in November 1953 will now be two whole years older when she retires than a woman born in March of the same year. It is easy to see why she might regard this as unfair.

These are the original WASPI women - those born in 1953-4 who suffer an increase of up to 18 months in their retirement age as a result of the 2011 change. Their retirement ages have been extended by a total of between 3 and 5 years, mostly due to a transition schedule that was established in 1995.

However, women born in 1953-4 were also affected by the 2007 rise to 66 (68) for both men and women. Robert Leach's chart shows how:

This chart requires a little explanation. "Previous 2" is the date that a woman would have retired under the transition to the harmonised retirement age had there been no additional increase. "Previous 1" is the date that she would have retired had the Coalition government gone ahead with the increase as originally proposed in 2007. But in 2011, the Coalition government softened this transition. This was largely due to the effect on women born in 1953-4, some of whom would suffer a two-year increase in their retirement age because of the combination of this change with the tightened harmonisation schedule described above. The Government agreed with campaigners that no-one should suffer an increase of more than 18 months on top of the original harmonisation schedule. The transitional schedule for the 2007 increase was therefore amended to that shown in the "current" column.

However, despite this softening, many women born between 1954 and 1959 are furious. When they started work, they believed they would retire at 60. Now, most of them have to work until they are 66. Women born between 1951 and 1953 are also angry, even though they have not suffered such a steep increase in their retirement ages as their younger sisters. They have seen women only slightly older than them retire at 60, while they have to wait for up to another 5 years.

Many of these women say they did not know about the extension of their retirement ages until recently. The WASPI campaign claims that women have been given so little notice of the changes that they had no time to prepare. It is raising a petition to Parliament calling for "fair transitional arrangements" for women born from April 1951 onwards.

It is fair to say that the DWP's communication has been abysmal. The original 1995 change was not communicated at all: it was reported in the media at the time, but no attempt was made to contact the women affected. This is the main change that affects women born in the 1950s, since it adds up to 5 years to their working lives. However, it also affects younger women. In 1995, all women of working age would have expected to retire at 60. All of them have had increases of up to 5 years in their working lives, and none of them were contacted. It is not clear why WASPI women claim that the lack of notification made the transition unfair to them in particular.

DWP says that it has written to all the women affected, though it admits that it only started to write to them from April 2009 onwards. However, according to the BBC's Paul Lewis, many of the letters may have failed to arrive, apparently due to addresses being out of date as a result of appalling record-keeping by DWP and HMRC. And of course, notifying WASPIs of changes from 2009 onwards was utterly inadequate anyway. Many were already close to 60: since they had not been informed of the 1995 changes, they were expecting to retire shortly. Suddenly they discovered that they were not eligible for a state pension for - in some cases - another 5 or 6 years.

The Government now says that there will be 10 years' notice for future pension age rises. On the basis of this, WASPI women argue that they should receive compensation because they were given far less notice of the extension of their pension age. But if women born in the 1950s can claim compensation because lack of notification means that they have had insufficient time to prepare, so can younger women.  After all, a woman born in 1960 - outside the WASPI campaign's target age range - would now be 55. If she is expecting to retire at 60, having never been told otherwise, she faces a 6-year increase in her retirement age with only 5 years notice. In 2004, the DWP themselves produced evidence that younger people were less aware of the harmonisation than older ones (h/t Alan Higham). Given this, why is the WASPI campaign limited to women born in the 1950s?

And there is another mystery here. What on earth have pension providers (employers and private schemes) been telling people?. Annie Shaw tells me of professional women - nurses, teachers, even a head-teacher - who took early retirement in their fifties on final salary pensions, fully expecting to receive their state pension at 60. Some of my Twitter contacts told me that they had taken voluntary redundancy, or allowed their contracts to expire, on the understanding that they would receive a state pension at 60. One of my WASPI contacts told me her private pension provider had given her a pension statement which showed her state retirement age as 60. My own workplace and private pension providers, too (I have several), continue to show my retirement age as 60 even though my state retirement age is now 66 and I have never told them I intend to retire early. Preparing pension statements, or even advising people when they can safely retire from a financial perspective, on the assumption that people's state retirement date is years earlier than it is likely to be in reality is highly misleading. Surely we should expect the pensions industry to behave more responsibly?

Having said all this, though, I do not think these WASPIs are behaving entirely reasonably. The harmonisation of retirement ages for men and women was extensively debated prior to the 1995 Act, and the passing of the Act was widely reported in the media at the time. Many people I have talked to assume that I knew about the changes because I worked in banking. But the pensions industry is completely separate from banking, and working in finance does not imply knowledge of pensions legislation. I actually heard about it on Radio 4's Woman's Hour, which as a young mother in 1995 I used to listen to while my son was asleep. So although I was not notified until this year that my retirement age would be 66, not 60 as it was when I started work, I already knew about the extra 6 years. If I can pay attention to what is reported in the media, surely these professional women who retired in their fifties could do so too?

Additionally, what were these women thinking of, planning their retirements - including giving up their jobs - on the assumption of receiving a state pension at 60? Surely they should have checked their entitlement? DWP says that it has been possible to ask for a statement of entitlement, including pension age, since 2001. Planning retirement without checking looks like folly to me. Though DWP does not exactly make it easy for people: even now, the online entitlement checker couldn't tell me how much I will receive, apparently because the state pension is changing in April 2016, though it was able to tell me my retirement age.

I have some sympathy for less educated women who did not or could not read or listen to the sort of media where the pension changes were reported, and did not know how to check with DWP about their pension entitlement. But I have none at all for professional women who simply did not bother. They should know better.

However, there is a deeper issue. It is not at all clear exactly what the WASPI campaigners want. They say they want some kind of "transitional relief" for women suffering as a consequence of pension age extension, perhaps because they have given up work and now face the indignity of JSA or ESA claims and the hardship of living on benefits that are less generous than the state pension.  But in a recent interview on BBC Breakfast, the principal WASPI campaigner, Anne Keen, said his:
We are saying to the government, you have a moral obligation to put those women in the same financial situation that they would have been if they had been born on or before 5 April 1950. It's not a handout: we are asking for what is rightfully ours."
This muddies the waters considerably. In effect, Ms Keen wants the equality legislation rolled back so that she and other women born in the 1950s can receive the state pension at 60, which they consider their "right". If it is a "right" for them, why is it not for younger women? And what about the fact that reinstating their "right" would create a "cliff edge" for the next cohort of women? Those born in 1960 could legitimately complain about the unfairness of having to retire SIX YEARS later than women only a few days or weeks older. I must declare an interest here: I would be one of those women. It is hardly surprising that I am less than sympathetic to those WASPIs who simply want their pension entitlement reinstated.

Nor is it helpful to conflate the problems caused by the DWP's failure to communicate the extension of pension ages with the freezing of pensions to expatriates, the uprating of pensions in line with CPI instead of RPI, or the fact that a large proportion of women - especially older ones - will not qualify for full entitlement to the new state pension. All of these are important issues, especially the last, which I consider to be a major scandal in the making. But they are not the same as the WASPI problem.

And last but by no means least, it is absolutely wrong in my view to use the fact that some WASPI women are sick, disabled or in a caring role to justify reinstating retirement at 60. The support currently offered to sick, disabled and carers is a national disgrace and I for one want to see it vastly improved. Allowing WASPIs to use earlier retirement as a means of getting better support will set back even further the cause of older men and younger people in the same situation. And as for the notion that a pension age of 60 is justified to enable WASPIs to care for their grandchildren, I really don't see why the state pension should become a childcare subsidy.

So to conclude, I agree that the DWP has made a total hash of the extension of women's retirement ages, and because of this there probably is a case for some women receiving exceptional assistance to relieve short-term hardship. But this must be considered on a case-by-case basis. However angry the WASPIs are, no way is direct or indirect reinstatement of state pension rights at 60 for women born in the 1950s remotely justified. Ros Altmann, the Pensions Minister, is absolutely right to rule it out. There are far more important injustices to address than this.

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It would have been tasteless to put an image of a swarm of wasps at the head of this post. But I couldn't resist adding a link to the Wasps overture by Ralph Vaughan Williams. Enjoy. 

The original image has been removed, along with all links to WASPI campaign material from both the post and the comments. I do not support this campaign and I will not promote it. 









Comments

  1. This comment has been removed by the author.

    ReplyDelete
  2. So you voted Ms Coppola for the 1995 act that now has caused such hardship today. So betraying fellow women in the nation.

    Equality would have been for men to get the state pension pay out at age 60, which is equal reward within the concept of discrimination. The rise of retirement age is simply the Tories back chasing the average death age, so that no pension is paid out of any kind.

    The state pension costs nothing, because putting money into the hands of people puts money into the local shops and businesses. And 75 per cent of all tax comes from each pound pound we spent, which stealth taxes have doubled over last 10 years.

    Men have been discriminated against by losing the state pension at 60 from back in 1995.

    And the Tories destroyed the SERPs pension which is abolished now by the flat rate next year from as far back as 1978. Because the opt out wiped out the lowest waged getting the top up to the state pension, when the working poor have still no access to a works pension because below the minimum threshold.

    It was the Tories who broke the link of state pension annual rises and the rise in wages.

    A full SERPs pension today is around £281 per week. That is now as rare as hen's teeth as over 80 per cent of older workers have been contracted out of SERPs and in no way did any top up to their works pension make up the difference.

    A £5000 works pension (the average for public sector women is far less) has lost around £5000 in state pension, to bring money in old age to the survival level of £10,000 a year for pensioners.

    In private sector jobs, women did not have access to works pensions until very recent history, so only have the state pension as income in old age.

    So your understanding of millions of women's financial history re National Insurance contributions / credits is woefully out of touch.

    I became chronically ill because of welfare reform that lost me benefit, and my life is endangered by loss of state pension and even more by no access to Winter Fuel Allowance.

    The next scandal is the flat rate that will never be single tier and will reduce or wipe out the state pension. See how at end of: https://you.38degrees.org.uk/petitions/state-pension-at-60-now

    But that is to help others, because I cannot survive til 2019 without compensation for loss of state pension for 5 years from 2014.

    But the flat rate is less state pension. Because with average rises to state pension, my state pension would have been £135 per week by 2019, when my forecast is £122 and that sum is not guaranteed by DWP nor would they sign the letter of pension forecast.

    The flat rate abolishes Pension Credit (savings) top up to the guarantee credit, which has risen to 62 years and 6 months, but has been reduced in money year on year since 2010.

    The Autumn Budget has stopped guarantee credit to ladies who can visit relatives abroad during winter and save on heating bills, being as denied both state pension and Winter Fuel Allowance..

    Government seems determined to cause us health issues due to living in homes where we can never afford to turn on the central heating, however cold it gets.

    Not everyone can continue to work past 60, with over 40 per cent of over 50 being disabled / chronic sick. Over half of over 60s are within the working poor, being attacked on all sides by cuts to in-work benefit, the bedroom tax, loss of council tax support and massive council funding cuts to come.

    I come across women in the queue who still don't know they'll not retire at 60, which comes as a surprise to the ladies across the counter as well.

    A company that failed to write to each individual effected by such a massive change to money received would have been in hot water.

    Expecting women to find out from some obscure money pages in newspapers, when newspapers are in terminal decline in readership, is morally reprehensible.

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  3. This forcing of women into the workplace will eventually be seen as the biggest sociological disaster ever to hit these Isles.

    Better to give both men and women a national dividend / independence from wage slavery.

    Ps energy balance figures tell all.
    British and Irish residential energy consumption continues to decline while transport inputs increase.

    The banks see the cars as better citizens as it is easier to control scarcity management via their inputs.
    Humans are so messy......

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  4. There is a general feeling that the state is waging war against its citizens: that the majority are worse off, that a minority is better off. That's probably fuels the anger. Little things like these pension changes, and the associated bad communication by the government and industry ("THE MAN" if you will), are just lighted matches waiting to set it off.

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  5. But the banking state is at war with humanity.

    All the evidence is in for Christ sake.

    100s and 100s of years of the stuff.

    How much more evidence do you need!!!!!

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  6. This is funny , do not agree with all of it but they get close.

    The cult of capitalism...........
    https://m.youtube.com/watch?v=l8CqD3jW5OM

    Ever wonder why Gaelic islands with big tides such as the Baskets or Mingulay and thus more or less divorced from the Victorian and Edwardian money economy wee happier places.......??????

    ReplyDelete
  7. In response to Neil Wilson's "work will set you free" MMT dogma.
    British labour value concepts is a dud , even worse then that -its clearly a capitalistic construct.

    https://m.youtube.com/watch?v=xOUcQeNzzx0

    MMT is exposing itself as a den of the super capitalists
    Quite funny really.
    Oh so progressive until we get to the marrow of the debate.
    Then everything changes..........quite predictably .


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  8. I have removed the comment that contained the link to the WASPI petition, along with the replies to that comment. I will not promote this campaign on my blog, even indirectly by means of links. Any further comments linking to WASPI campaign material will be deleted.

    ReplyDelete
    Replies
    1. Thank on behalf of WASPI for all the new signatures your blog has generated - much appreciated ;)

      Delete
  9. One of my wife's pensions from a major bank - her main one- will not estimate her pension entitlement. She is entitled in just over two years aged sixty. They have told her how to calculate it admittedly. It appears this is because of complex interactions with dead state second pension arrangements. Obviously she would quite like her estimate confirmed for financial planning. When last approached I could not nor could my wife get an estimate of the impact of the new state pension arrangements on our state pensions because we have always been in opted out schemes. The important point is that the more complex, less certainty and less interpretation available the more it encourages young people (who are those who can influence their pensions most) to bother.

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    Replies
    1. DWP is a disaster. At present, they are not able to tell anyone what their pension entitlement will be because they are still working out the effects of the changes due to come into force in April 2016. These changes will affect a lot of women, since among other things they raise the minimum no. of years of NI contributions to 35 from 30. Personally I think this is a much bigger problem than the raising of the pension age.

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    2. I agree people have to be responsible for their own financial planning. Rightly we are in a period when pension entitlements are being debated and reviewed. The age when pension rights kick in will continue to rise I am sure. 60 and 65 seemed such fixtures for so long s employers and governments put head in sand. My kids expect them to rise through their lives. Checking one's NI record is not difficult, And yes many may assume they have enough in old money, but do not in new money.

      Delete

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