Chloe speaks in Pensions Debate

 

I was pleased to take part in a debate in Parliament last week on the women’s state pension age. Having had a number of constituents raise this with me, I have already raised with the issue with Ministers and was pleased to make my contribution to the debate.

 

Historically the retirement age has always been lower for women than for men. However, under changes made in 2011, the women’s retirement age will rise to 65 by 2018, bringing the two in line. Inevitably though this means some women now face retiring much later than they had previously expected and planned for. It is also evident that this change was not communicated as effectively as it should have been.

 

I’m proud of the enormous progress which has been made in improving the lives of women in society and in the work place. But as people now live longer we must face up to the reality of what this means if the system is to continue to function.

 

By way of background, under an Act of Parliament passed in 1995, the women’s State Pension Age was scheduled to increase from 60 to 65 between 2010 and 2020. In 2011 though, the reality of public finances meant reforms were desperately needed if a more generous state pension was to remain affordable. Accordingly the timetable was revised, meaning the women’s state pension age will now reach 65 by November 2018.

 

I passionately believe a civilised country provides for families, protects the vulnerable, helps those looking for work and supports people in retirement. These are the principles which should guide our thinking on this issue.

 

A petition was submitted to Parliament highlighting three principle concerns: the lack of notice; changes being made faster than expected; and the lack of time to plan.

 

One constituent told me they had worked since they were a teenager, and were concerned about their own health challenges, caring burdens and the prospect of re-planning.

 

Others are worried about the way the retirement dates work out. Indeed, one told me in 2011 that “a woman who is just two months older than me can retire a whole year earlier.”

When the reforms were first debated in 2011, a constituent told me she was concerned about the “double attack” on her. She described how she felt when she received the first notification of change. She said: “I didn’t like it, but eventually accepted it and made the necessary changes to her plans, both mentally and financially”. She then received another notification of change forcing her to readjust a second time.

 

Another constituent put forward a very powerful and emotional argument. She said:“When I first heard my retirement age had gone up from 60 to 64 I was shocked and tried to ignore it.”

 

The Government listened to arguments made at the time, when Parliament debated changing the timetable from 2020 to 2018, and in response to concerns raised decided to cap the maximum increase in the State Pension Age at 18 months relative to the 1995 timetable. Nevertheless, those words encapsulate the communication problem which exists. For someone to be so shocked that they tried to ignore the problem shows just how powerful the problem is.

 

As I said in the debate, our first priority must be to protect those who can no longer work. Secondly, we should provide the right support for those who can work. Thirdly, we should maintain sound public finances. Failure to do so hurts every single person in the country. Fourthly, we should of course communicate better so people can plan. This was my main message to Ministers last week.

 

I’m glad that all of those women affected will receive the new Single Tier Pension. This new State Pension will be much fairer for women, who will now have years taken out of work to raise a family counted towards their National Insurance record. This means around 650,000 women will receive an average of £8 more per week in the first ten years.

 

On pensions generally, I think it is right for this Government to be committed to supporting those who have worked hard all their lives. The triple lock policy ensures your pension will always rise by the highest of earnings, prices or 2.5%.

 

It is unavoidable though that the pension age had to rise. When the state pension age was first set at 65 in 1926, male life expectancy at birth was 64 compared with 89 today. Indeed, if the state pension age had risen in line with the average life expectancy at 65 since 1926, it would now be at least 75. We have a significant gap which we need to make up.

 

If we looked even further back in the history books, we would see that when the state pension was set in 1908, the average life expectancy was 41. If we want a more generous state pension the only way to fund this is by increasing the pension age.

 

We cannot delay difficult decisions for ever. Nor can we duck them. However we must maintain the principles of providing for families, protecting the vulnerable, helping those who look for work, and supporting those who have worked to enjoy their retirement. I am confident that with a strong economy we can go on delivering this.