The campaign set up by a group of women born in the 1950s to get fairer treatment when it comes to the state pension has gathered a large amount of attention since the start of the year.
WASPI – Women Against State Pension Injustice – was created 12 months ago to highlight the fact that thousands of women in their 60s have been forced to wait longer than they expected to get their state pension.
Changes to women’s state pension age
In 1995, John Major’s Conservative government passed legislation that said women’s state pension age (SPA) would rise from 60 to 65 – to match men’s – between 2010 and 2020. Then, in 2011, the coalition passed a Bill which meant that the rise would be even faster, with both women’s and men’s SPA scheduled to reach 66 by the end of this decade.
WASPI’s chief complaint is that both these changes were not properly communicated and as a result many women have only found out shortly before their 60th birthdays that they are not in fact on the cusp of getting their pensions.
Campaigning for fairer treatment
The campaigners want some form of fair treatment, which probably boils down to those women affected being allowed to get their pensions earlier than the current legislation allows. But so far, the government has refused to change its position, largely due to the potential cost involved.
A recent suggestion by MPs on the Work and Pensions select committee has however created some interest. The committee has proposed that minsters consider allowing people to take their state pensions early, but on the basis that they will get lower weekly payments for the rest of their lives than if they had waited until their official SPA.
Introducing an early access option
Carefully implemented, such a plan could be cost-neutral for the Treasury in the long-run (although in the short-term, early access would inevitably prove more expensive). The committee has suggested that this would be a possible solution to the problem of the WASPI women struggling because they have planned their finances on the basis of retiring at age 60.
The MPs’ proposal is the mirror image of the current policy which allows people to delay taking their state pension in order to get higher payments at a later date. At the moment, a one-year delay leads to a 5.8% increase in state pension – although this is much less generous than the 10.4% annual uplift that was available until 6 April this year.
Change is unlikely to come soon enough
The early access suggestion has gained some support already from the pensions industry, which likens the plans to the private pension freedoms introduced last year. But some experts have pointed out that, even if the government does decide to introduce the option of taking state pensions early, many of the women represented by the WASPI campaign will not benefit.
Typically, legislation such as this takes at least a year or two to come into effect – so even if it was brought in as soon as April 2018, a significant proportion of the women affected would already have reached, or would be about to reach, their new SPA.