What WASPI women want (and warrant)

by Hugh Nolan   •  

As we head into the brave new world of 2020 with a strong majority Government that has every chance of seeing all its policies implemented during its five-year fixed term, it seems a good time to review the WASPI (Women Against State Pension Inequality) situation to see whether Jeremy Corbyn’s Labour Party had a point about compensating the 1950s women who saw the age at which they can take their State Pension (“State Pension Age” or “SPA”) increased.

Background to SPA equalisation

The Pensions Act 1995 laid down gradual increases in SPA for women between 2010 and 2020, with the objective of eventually equalising their historic retirement age of 60 with the (then) SPA of 65 for men. That was a slower process than the 15 years recommended by the Turner Commission and the ten years recommended by Saga and seemed long enough to give those affected a chance to plan ahead (provided, of course, they knew about the change…).

Occupational schemes faced with the equalisation issue following the Barber judgment were only able to make changes to normal pension ages for pensionable service from 17 May 1990 onwards but the SPA was amended retrospectively. This is undoubtedly a bit harsh but it is understandable that Parliament took that approach. It is arguably justified by the drive for equality, intergenerational fairness, the need for a sustainable State Pension and the pressure on public finances – especially with an ageing population and an increasing dependency ratio with fewer workers relative to pensioners. At least the women affected had 15 years or more to adjust to the change.

Accelerated programme

However, the Pensions Act 2011 accelerated the change from 63 to 65, so this happened from 2016-2018 rather than 2016-2020 as originally planned. There were concessionary transitional arrangements to limit the impact of this later change so that no woman saw an extra increase of more than 18 months in her SPA compared to the Pensions Act 1995 timetable. That does, however, mean that many women saw an additional delay of 18 months in receiving their State Pension, with only 7 years’ notice (if they were even aware of the change at that point). SPA for both men and women is now increasing to 66 from October 2020 and then on to 67 by 2028, with a further rise to 68 currently on the statute books for 2044-2046.

WASPI women want to be compensated for the change in their SPA to 65, citing long-standing inequality with men in other areas and a lack of notice as justification for retaining the more generous retirement age. I have a lot of sympathy for the inequality that women have suffered over the years (and continue to suffer) but I can’t see that as a compelling reason to give them a better pension than men. I’d rather see society address the underlying inequality. In any event, it’s true that women live longer than men on average so the same State Pension is typically worth more for a woman than a man.

The danger of assumptions

I have less sympathy for the argument that women weren’t given enough notice for the original change from 60 to 65. The Department for Work and Pensions (DWP) ran an advertising campaign and wrote literally millions of letters advising women of the SPA changes, though naturally some weren’t safely received for various reasons (or weren’t understood and remembered). I realise that I may be rather complacent about how widespread the news was disseminated as an industry insider. But the key point for me is that none of the affected women would have had any quote whatsoever or any other official information based on an SPA of 60 from 1995 onwards. WASPI women may have been under the impression that they’d be allowed to retire at age 60 like their mothers and grandmothers had, but that was simply wrong.

Although it’s an understandable misunderstanding, I think this apparent belief in an SPA of 60 was an unjustified assumption, particularly for those who had received letters notifying them of the changes. I wouldn’t want to see people being compensated for an unreasonable expectation and I haven’t seen any convincing case put forward as to why women could reasonably expect to retire at age 60 or make plans and decisions on that basis without checking at any point in the previous decade or two. Even if I were convinced that women had good cause to think their SPA was still 60, I would question how they could plan properly for retirement without knowing what pension they’d be entitled to and I’d challenge how they could know that without asking. In fairness though, the WASPI women aren’t the only people who blithely expect their State Pension to be adequate for retirement without knowing what it actually is.

Sympathy in equal measure

So, I am left with the view that the increase in the SPA from 60 to 65 for women was reasonable and that an extended period of notice was given for the change. My remaining sympathy is for those women who relied on their mistaken belief of an earlier SPA and took irrevocable decisions based on that belief, where I could easily be persuaded that they deserve special treatment even if their financial hardship arose from their own misunderstanding. On balance, I believe that the Labour Party election commitment to compensate all the affected women was misguided.

There are undoubtedly many moving stories of personal circumstances that tug the heartstrings, setting out the difficulties caused in individual cases by the SPA of 65 for women. There are WASPI women who have been unable to carry on working past age 60 due to illness or who have been unable to find (decent) jobs after being made redundant. There are others who have died shortly after retirement having paid into the system for up to 50 years, who could have had the benefit of a few years of retirement and pension if they’d been allowed to retire at age 60. Some have had to apply for Job Seekers Allowance, having to justify their ongoing search for employment after a lifetime of contributing. The harsh reality though is that there are similar stories for men too. If we want equality (and I do), then any sympathy for people prevented from retiring before age 65 should be for men as well for women and for those born in the 1960s (or whenever) as well as those in the 1950s.

Sting in the tale

That said, I take a completely different view about the accelerated timetable set out in the Pensions Act 2011. Those changes were introduced at relatively short notice and were a pure cost-saving measure rather than a way of achieving equality, which was already in hand. Women affected by this change had to wait up to 18 months extra to retire, or use any private pension savings to bridge the gap to their new retirement age. The transitional arrangements recognised that the notice given was too short and mitigated the effect of the change but I can’t understand why it’s any more acceptable in principle to make women wait an extra 18 months at short notice than two years? Frankly, the women affected here were being completely ripped off in the name of austerity. Parliament may have been entitled to make the change as a matter of law (in the same way that State pension increases were changed from RPI to CPI in 2011) but it doesn’t seem ethically correct to disproportionately penalise this specific group of people, who had been disadvantaged over a lifetime of unequal treatment and were already in the process of having one of their few positive inequalities gradually removed.

If I were King for a day, I’d compensate the WASPI women for the change made in 2011, simply by paying them the pension they missed out on for the months of delayed retirement. I doubt if the Courts will insist on that in any WASPI appeal to last year’s unsuccessful action against the changes,  but I still think it would be morally right and the cost would be modest relative to the Labour pledge. In practice, Boris Johnson could do this if he wanted but will surely be tempted to let sleeping dogs lie in the expectation that it won’t hurt him in the next election any more than it did this time. I’d encourage Labour and the WASPI women to lobby for a reversal of the 2011 provisions rather than keep fighting the losing battle about the original 1995 changes. While the Tories might just be prepared to give something (and will have to if the Parliamentary and Health Service Ombudsman finds in its delayed investigation that there has been maladministration), they’re unlikely to open the can of worms if all it gets them is a continued kicking in the press for not going fully “Back to 60”.

[1] Mr S, PO-21607

Further reading

Pensions Dashboard Ready Administration– a Utopia, or can it actually happen?

by Colin Wheeler   •  

Your Quarterly Pensions Update Q3 2020

by Andrew Kerrin   •  

‘Superfunds’ – The Pensions Regulator’s guidance for trustees

by Alan Collins   •  

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