No one at 40 puts much thought or planning into the distant day that they will be 60. In 1995, women in their 40s learned that, sometime in the next century, their pensionable age would rise. From 2010, it would drift upwards until by 2020, women, like men, would be 65 before they were eligible. The oldest in the group, those born early in 1950, would see their pension date slip by just a couple of months; those born after October in 1953 would wait a whole year. Little was made of the change. It was not a perfectly fair system, but all this lay years ahead.
In 2011, all that changed. The coalition government decided equalisation must be brought forward two years to 2018; and that by 2020, the new state pension age for both men and women would be raised to 66. The upshot is that women born at the end of 1953 or in 1954 will be around 65 before they are eligible. These changes are coming in so sharply that a year’s difference in age can mean an extra three years’ wait for a pension. They were only clarified when the people concerned were already at least 57.
No one is complaining about equalising state pension age. Even though many women of this generation were still steeply discriminated against in terms of pay and access to pensions, equalisation is accepted as fair. But for a government that defends its protection of generous benefits to older people – the winter fuel allowance, say, or free TV licences, or the freedom travel pass – on the grounds that pensioners can’t suddenly compensate for lost income, the failure to make sure that future pensioners were individually informed of the changes is a serious administrative failure. At the time, protesters argued that the consequences would be unfair and disproportionate, not least because women would have no time to make up for a loss of pension income that could amount to £10,000. They argued that equalisation should return to its original timetable of completion by 2020. The most forceful of the campaigners was the director general of Saga, Ros Altmann.
Baroness Altmann, as the pensions minister, now sits across the desk from her former self. She says she has shot her bolt, done all she can to try to persuade colleagues to soften the impact of equalisation, and failed. It would be too expensive. Rightly, MPs on the Commons pensions committee are holding her feet to the fire. In an interim report published on Monday it called for urgent action on concerns that go beyond the impact of rushing through age equalisation. On top of the unwelcome and sometimes unexpected raising of the age, from April, all new claimants will start to receive the new state pension instead of the old two-tier pension. MPs say the statements sent on request to show how much a new pensioner can expect to receive are confusing and unduly complex; MPs warn that people, already wrestling with the impact of delay, may also be getting unrealistically optimistic expectations of their future incomes. Retirement, when it comes, may be an unpleasant shock.
The Department for Work and Pensions is a huge department with many very complex responsibilities. It makes life-changing judgments in the lives of vulnerable people and, as the demand for food banks shows, too often it gets them wrong. Now it must move fast and decisively to make sure that the MPs’ next inquiry is not into a new pensions crisis.
• The picture caption on this article was amended on 12 January 2016. An earlier version described Ros Altmann as the former pensions minister; she is the current pensions minister. The text of the article was tweaked to make this clear.
